AI software startup Builder.ai, once valued at $1.5 billion and backed by tech giant Microsoft, is on the brink of collapse amid explosive allegations of faked revenue involving Indian tech company VerSe Innovation, the parent of popular platforms DailyHunt and Josh.
Fake Transactions to Inflate Growth?
Between 2021 and 2024, Builder.ai reportedly engaged in questionable financial transactions with VerSe Innovation.
According to insider claims, both companies issued large invoices to each other for services that were never actually delivered.
This method commonly known as round tripping was allegedly used to artificially boost revenue figures and present a stronger financial outlook to investors.
While Builder.ai faces heavy scrutiny, VerSe Innovation has denied any wrongdoing, stating that all commercial interactions were legitimate and transparent.
Legal Trouble and Leadership Shake-Up
Builder.ai’s co-founder Sachin Dev Duggal is currently under investigation by Indian authorities in a separate case linked to money laundering.
Another co-founder, Saurabh Dhoot, who was previously involved in the Videocon loan fraud case, exited the company in 2022.
Financial pressure mounted as the company defaulted on major payments:
- $85 million owed to Amazon
- $30 million owed to Microsoft
To lead the company through a possible restructuring, Builder.ai appointed Manpreet Ratia as the new CEO.
From Billion-Dollar Hype to Financial Meltdown
Builder.ai, once hailed as a next-generation AI platform for building custom apps, is now seen as a cautionary tale.
The case underscores the risks of overhyped valuations and emphasizes the need for financial accountability, even in fast-growing tech startups.
