The former CEO of Oura Health has sued the smart ring maker in California federal court, claiming that despite working "tirelessly" and growing the health technology company into a multibillion-dollar success, he was ousted and the company's board reneged on promises to give him millions in stock options.

In his Friday breach of contract complaint against Oura Health OY and Ouraring Inc., Harpreet Singh Rai alleges he was promised an ownership share in the Finnish company of 5% if he raised €10 million ($11.55 million) in capital — a goal Singh Rai says he exceeded.

Instead of the pledged reward, however, he was fired without cause, and Oura "reneged on paying him the millions of dollars' worth of equity compensation that he was owed," Rai says in his lawsuit.

Oura began a decade back when its founders launched a Kickstarter campaign in August 2015 for a ring it said would monitor wearers' sleep as well as the quality of their rest by monitoring their heart rate, respiration rate, body temperature and movement.

Rai says in his suit that he was one of Oura's first customers and was wearing the wellness ring in 2016 when he "serendipitously" met one of Oura's founders at a Whole Foods in New York. Kari Kivelä noticed Rai's ring, and the two began talking, according to the complaint. At the time, Rai said he was working as a Manhattan hedge fund portfolio manager.

"This chance encounter ultimately led Rai to quit his lucrative hedge fund job and devote his life to Oura," the suit says.

At that time, Oura was struggling financially, had only about 15 employees, was having trouble pitching investors "and repeatedly ran out of capital," Rai says.

He claims that after his chance encounter with Kivelä, he subsequently met with other team members at Oura to learn more about the company. In September 2016, he became one of the first non-Finnish investors in Oura, investing $1 million in a Series A financing round, according to the complaint. Rai says he also recruited other investors, including future board member David Shuman.

In May 2017, Oura's founders asked him to serve as president of the company, according to the complaint. Rai says he was employed as an independent contractor with a $100,000 salary and granted shares in Oura that constituted about 5% equity in the company. The deal, attached to the complaint, is signed by another company founder, Petteri Lahtela.

In April 2018, the board promoted Rai to CEO, and he became one of the company's 40 full-time employees, according to the complaint.

"Under Rai's leadership, the company grew exponentially in sales and revenue," the suit says. "Share prices grew, and in November 2018, Oura raised another $5 million."

Less than a year later, in July 2019, Rai led Oura through a Series B financing round, raising approximately $28 million for the company, according to the complaint.

"Pursuant to Rai's written employment agreement, the closing of a Series B financing entitled him to additional stock options, which would bring his holdings back to 5% of equity in Oura," the suit says, adding that his share of equity "had been diluted" by the prior rounds of fundraising.

Those additional stock options were scheduled to vest over a 42-month period, according to the complaint.

"Rai trusted Oura to honor their agreement," and "Oura's board repeatedly assured Rai that they would grant those options," the suit says.

In February 2021, Rai said he scheduled a meeting with Oura's board because his initial tranche of stock options — from 2017 — would be fully vested by May of that year, according to the complaint.

"They represented approximately 5% of Oura's common equity at the time," the suit says. "Today, 5% of Oura common equity is worth approximately $175 million based on Oura's recent $11 billion valuation."

Board Chair Eurie Kim told him a compensation committee would go over his options grant, according to the complaint.

Rai says he met with the compensation committee in September 2021, and the board committee proposed a new grant of 1.1% of outstanding shares, which would have increased his options to only 3% of equity. They said he would get another 1% when Oura became valued at $5 billion, and another 1% when, and if, Oura reached a valuation of $10 billion, Rai added.

Rai says he reminded the compensation committee that his compensation had been fixed during the Series B financial round in October 2019.

"Kim, however, claimed that it would have been too difficult to document Rai's option grant in October 2019 … and stated that the board was under no obligation to do so following the founders' departures," the suit says.

The inked 2018 agreement was stored with the company and available to the board, Rai says in his suit. Further, he claims Kim had represented to him during the negotiations over the Series B financing that he would be allocated additional options to bring his equity share back to 5%.

During this time period, Rai says he was working on Oura's third-generation ring, which was launched in October 2021 and was "overwhelmingly successful."

Weeks later, Kim and another board member, Kevin Lin, told him he was being fired and that they would accept his resignation, Rai says, and he told them he had not resigned.

"The conversation of Nov. 12, 2021, evinced that Oura had determined not to approve the stock option grant included in Rai's agreement," the suit says. "Instead, Oura would continue to wrongfully prevent the board from approving Rai's options."

On Dec. 1, 2021, Oura announced that Rai was stepping down as CEO, which he had not done, according to the suit.

"Oura provided no cause or reason why Rai's employment was terminated," the suit says. "Oura had no cause or reason to terminate Rai's employment."

Rai is also entitled to nine months of severance pay, totaling $225,000, according to the complaint.

Under his leadership, the company grew to over 400, and when he left Oura in December 2021, it was generating revenues of more than $100 million a year, Rai says.

Representatives for Oura did not immediately respond to requests for comment on Monday.

A lawyer for Rai, Eric Rosen of Dynamis LLP, told Law360 that his client, "drove Oura to be the success that it is now, and it is only fair that he receive the compensation that he was contractually promised by the company."

In other litigation, brought by Oura, the U.S. International Trade Commission in August blocked smart ring makers Ultrahuman and RingConn from importing products it found infringed Oura's wearable computing device patent.

Rai is represented by Constantine Economides, Eric Rosen, Kaitlyn Gerber and Tyler Finn of Dynamis LLP.

Counsel information for Oura was not available.

The case is Harpreet Singh Rai v. Ouraring Inc. et al., case number 3:25-cv-09654, in the U.S. District Court for the Northern District of California, Oakland/San Francisco Division.