Benchmark Capital Partners, which now holds 13 percent of the company's stock and about 20 percent of its voting power on the board of directors, filed the lawsuit against Kalanick and Uber on Thursday.
At the heart of the suit is how Kalanick obtained outsize control of several Uber board seats in 2016, which, according to Benchmark, he achieved through "material misstatements and fraudulent concealment" of information.
Benchmark now holds one of the seats on the Uber board. Benchmark also seeks potential damages from Kalanick, but none from Uber, although it is named in the lawsuit.
In the lawsuit, Benchmark Capital says it never would have given Kalanick that power if it had known about his "gross mismanagement and other misconduct at Uber".
ICYMI, Mr Kalanick was a co-founder of the company and turned it into a tech giant worth $US68 billion ($86.5 billion).
Uber declined to comment.
The move is startling to say the least as Silicon Valley investors are famously reluctant to take actions against startup founders; according to Reuters, some investors are calling this move "the nuclear option".
In the lawsuit, Benchmark claims that it owns 13% of the company, as well as 20% of the voting rights. This is because the recent three additions are suspected of being the allies of the disgraced executive, which would make any decision made by the top dogs questionable. Benchmark and Kalanick are amongst the largest shareholders. It further says that Kalanick failed to disclose information about self-driving vehicle startup Otto, which was acquired by Uber.
"It is apparent that Kalanick has attempted to acquire the power to pack the Board to facilitate his desired re-appointment as Uber's CEO", the suit alleges. "We are committed to hiring a new world-class CEO to lead Uber".
The pioneering company has been facing pressure to rein in a no-holds-barred management style led by Kalanick, 40, and to reform its work environment.
Kalanick furthered Benchmark's suspicions that he was angling for a return to power when, after resigning as CEO and departing the board seat reserved for the CEO, as required, he immediately reappointed himself to one of the three vacant board seats.
It lost another key member of its personnel on Thursday when its senior vice president of global operations, Ryan Graves resigned, although Uber's first ever employee will keep his seat on the board.