Builder.ai Accused of Faking VerSe Deals to Inflate Sales Before Bankruptcy

Builder.ai Accused of Falsifying Sales Through Round-Tripping with VerSe Innovation

Builder.ai, an AI startup that recently announced bankruptcy plans, is under scrutiny for allegedly fabricating business transactions with Indian social media company VerSe Innovation to inflate its sales figures. According to documents reviewed by Bloomberg and insiders familiar with the matter, both companies exchanged invoices for roughly equal amounts from 2021 to 2024 without delivering the corresponding products or services.

What Happened?

This practice, known as "round-tripping," involves companies invoicing each other for services that are never actually rendered. Builder.ai reportedly used this scheme to present exaggerated revenue numbers to investors, creating an illusion of strong business growth.

Sources who requested anonymity due to the sensitivity of the situation confirmed that many such transactions were purely paper-based with no real exchange of goods or services. This raises serious questions about the accuracy of Builder.ai's reported financial health.

Response from VerSe Innovation

Umang Bedi, co-founder of VerSe Innovation, denied the allegations. He called the claims “absolutely baseless and false,” emphasizing that his company does not engage in inflating revenues or recording expenses for services not provided.

Why This Matters for Sales Professionals

• Trust is essential. Inflated sales numbers undermine credibility with investors and customers alike.
• Due diligence is key. Understanding the real business behind reported figures can prevent costly mistakes.
• Transparency drives sustainable growth. Authentic sales data helps build long-term relationships and supports sound decision-making.

Builder.ai, once valued near $1.5 billion, now stands as a cautionary example of how inflated sales reporting can lead to collapse—even in high-potential sectors like AI, which recently saw a surge in investment sparked by innovations such as ChatGPT.

For sales teams working with AI companies or startups, this case highlights the importance of verifying the legitimacy of partnerships and revenue claims. Maintaining integrity in sales reporting is crucial to preserving both reputation and business viability.

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