Builder.ai Accused of Faking Sales with VerSe Innovation in Multi-Year Scheme

Builder.ai and VerSe Innovation: The Alleged Sales Inflation Scheme

London-based startup Builder.ai, once a high-profile AI company in the UK, recently filed for insolvency after raising over $500 million from investors like Microsoft and the Qatari Investment Authority. The collapse followed the sudden resignation of founder Sachin Dev Duggal and accusations that Builder.ai and Indian social media firm VerSe Innovation engaged in “round-tripping” to inflate sales figures.

Reports indicate that from 2021 to 2024, Builder and VerSe invoiced each other for nearly identical amounts without actually delivering products or services. This practice artificially boosted reported revenue, misleading investors and creditors about the companies' financial health.

What Is Round-Tripping and Why It Matters for Sales Professionals

Round-tripping involves companies creating fake sales between themselves to create the illusion of growth. For sales teams, this highlights the importance of transparency and accuracy in revenue reporting. Inflated sales numbers may temporarily impress stakeholders but can lead to severe consequences like loss of trust and financial collapse.

In this case, Builder.ai’s revenue forecasts were slashed dramatically—from an expected $220 million down to around $55 million—prompting creditors to withdraw support. This serves as a cautionary tale about the risks of relying on inflated or unverifiable sales data when making business decisions.

VerSe Innovation's Position and Market Presence

VerSe Innovation, based in Bengaluru, is a significant player in India's social media space, with apps like Dailyhunt and Josh attracting hundreds of millions of monthly users. Investors include Goldman Sachs and Google.

Despite the allegations, VerSe's cofounder Umang Bedi called the claims “absolutely baseless and false,” emphasizing that the company does not engage in revenue inflation. For sales leaders, this underlines the importance of safeguarding company reputation and maintaining clear communication with stakeholders during crises.

Leadership Changes and Aftermath at Builder.ai

After Duggal's departure, CEO Manpreet Ratia acknowledged “problems” under previous management but expressed confidence in a new direction. However, the financial damage led creditors to pull funding, and leaked memos revealed Ratia blaming lenders for the company’s collapse.

This scenario illustrates how leadership transitions and financial mismanagement can shake investor confidence and disrupt sales momentum. Sales teams should watch for early warning signs in financial reports and maintain open dialogue with leadership to adapt strategies accordingly.

Key Takeaways for Sales Teams

• Verify Sales Data: Insist on transparent and accurate reporting to avoid reliance on inflated figures.
• Understand Financial Health: Stay informed about your company’s financial standing, especially if it impacts customer trust or sales targets.
• Maintain Credibility: Protect your reputation by aligning sales claims with actual business performance.
• Be Alert to Leadership Signals: Leadership changes can affect sales strategies and company stability; adapt quickly as needed.

For sales professionals interested in AI and technology-driven markets, understanding these dynamics is crucial. To enhance your skills and keep current with industry developments, explore latest AI courses tailored for sales roles.