Builder.ai and VerSe Innovation’s Round-Tripping Scandal – The Full Story
Introduction: The Rise and Fall of Builder.ai
The tech world is reeling from the shocking collapse of Builder.ai, a UK-based AI startup once celebrated as a revolutionary force in software development. Backed by giants like Microsoft and the Qatar Investment Authority, Builder.ai promised AI-powered app creation. But behind the scenes, financial fraud, inflated revenues, and deceptive practices led to its dramatic downfall.
The Core of the Scandal – What is Round-Tripping?
How Builder.ai and VerSe Innovation Inflated Revenues
The scandal revolves around round-tripping—a deceptive practice where companies exchange fake invoices to artificially boost revenue without real transactions.
- Between 2021 and 2024, Builder.ai and VerSe Innovation (parent company of Dailyhunt) allegedly engaged in fake invoicing to create an illusion of business growth.
- VerSe denied the allegations, calling them “baseless and false,” but financial audits revealed discrepancies.
The AI Illusion – Humans, Not Bots, Powered Builder.ai
“Natasha” the AI Assistant – A Marketing Gimmick?
Builder.ai claimed its AI assistant “Natasha” could build apps effortlessly. In reality:
- The platform relied on 700+ human engineers in India to deliver projects.
- This misrepresentation raised serious ethical concerns about the company’s transparency.
Financial Chaos – Revenue Manipulation and Bankruptcy
Shocking Revenue Revisions and Investor Backlash
- Builder.ai slashed its 2024 revenue claims from $220M to $55M.
- Its 2023 revenue was revised from $180M to $45M.
- Lender Viola Credit seized $37M after a loan default.
Frozen Funds and Bankruptcy Filing
- Regulatory restrictions blocked Builder.ai’s funds, leaving it unable to pay employees.
- The company filed for bankruptcy in the UK, marking a dramatic end to its journey.
Leadership Shake-Up and Legal Troubles
CEO Exit and New Leadership
- Founder Sachin Dev Duggal stepped down as CEO but stayed on the board.
- Manpreet Ratia took over, launching a full financial audit.
Money Laundering Probe – Duggal’s Legal Woes
- Duggal was named in an Indian money laundering case linked to Videocon.
- He denies wrongdoing, claiming he’s only a witness.
Lessons for the Tech Industry – A Cautionary Tale
The Builder.ai scandal highlights:
- The dangers of financial manipulation in startups.
- The need for transparency and ethical AI claims.
- Why investors must conduct deeper due diligence.
Conclusion – The End of the Builder.ai Dream?
Builder.ai’s collapse serves as a warning for startups chasing rapid growth at any cost. Fraudulent practices, fake AI claims, and financial mismanagement led to its downfall—proving that sustainability and honesty matter more than hype.
