Founder of Shark Tank-backed startup Scholly sues his acquirer Sallie Mae

Chris Gray, the visionary behind the scholarship search platform Scholly, has initiated a lawsuit against Sallie Mae, the student loan giant that acquired his startup in 2023. Gray, who gained recognition after appearing on Shark Tank, alleges wrongful termination and claims that Sallie Mae is mishandling user data, including sensitive information about minors. Gray co-founded Scholly a decade ago, aiming to simplify the scholarship search process for students. His appearance on Shark Tank brought him investment offers from Daymond John and Lori Greiner, ultimately leading to the acquisition by Sallie Mae. As one of the few Black fintech founders to sell a company to a bank, Gray celebrated this milestone, believing it would enhance the platform while ensuring user protection. However, the situation took a troubling turn. In his lawsuit filed in Delaware Superior Court, Gray asserts that after the acquisition, Sallie Mae laid off key personnel, including his co-founders, and reneged on commitments regarding user data privacy. He contends that he was terminated shortly after he voiced concerns about the company's data practices. Gray seeks back pay, punitive damages, and legal fees through his lawsuit. He believed that Sallie Mae, as a federally regulated institution, would safeguard users' personal information. Instead, he claims the company circumvented regulations by establishing a subsidiary to sell data on Scholly users to third parties, potentially without their knowledge. In response to the allegations, Sallie Mae categorically denied Gray's claims, labeling them as unfounded. The company expressed regret over the accusations from a former employee and stated its intention to defend itself vigorously against what it deems baseless claims. Gray's journey began in Birmingham, Alabama, where he faced significant barriers to education. This experience inspired him to create Scholly, a platform that has since helped millions of students secure scholarships. However, he now finds himself at odds with the very institution he believed would uphold the values of transparency and student protection. As the legal battle unfolds, Gray remains committed to advocating for students and ensuring that their privacy is respected. He reflects on his journey with a sense of purpose, stating that he would make the same decision to sell Scholly but would also raise the same concerns regarding ethical business practices if given the chance.