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DailyHunt And Builder.ai Parent Faked Business With Indian Firm VerSe To Inflate Sales, Sources Say
- Builder.ai, a startup that recently announced bankruptcy plans, allegedly faked business with VerSe Innovation in India to inflate sales figures, as per Bloomberg and sources.
- The two companies engaged in 'round-tripping,' billing each other for products and services that were not provided, misleading investors about revenue.
- VerSe co-founder Umang Bedi denied the allegations, stating his company does not inflate revenues, and services exchanged were verified.
- Builder.ai, valued at $1.5 billion, faced financial scrutiny and reportedly overstated sales, leading to creditor actions and a planned bankruptcy.
- Builder.ai collected $60 million from VerSe for services, and both companies exchanged funds, seemingly balancing invoices to avoid suspicion.
- Followed by discrepancies in sales reporting, Builder.ai's CEO Sachin Dev Duggal stepped down, and the company decided to enter insolvency.
- VerSe, known for Dailyhunt and Josh apps, raised substantial funds, faced internal control issues per Deloitte, and aims to break even by late 2025.
- Auditor concerns over VerSe's controls and CFO resignation ahead of an IPO highlighted potential challenges in the company's financial management.
- Builder.ai and VerSe's collaboration, investors like Microsoft, and plans for an IPO raise questions about governance and financial practices.
- Despite public interactions between Duggal and Bedi, including investments and events, they clarify a professional rather than a close personal relationship.
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