Latest news with #VerSeInnovation
Bloomberg
2 hours ago
- Business
- Bloomberg
Tesla's Robotaxi Faces Key Month of Testing and Rollout
Welcome to Tech In Depth, our daily newsletter with reporting and analysis about the business of tech from Bloomberg's journalists around the world. Today, Ed Ludlow checks in on Elon Musk's accelerating plans for a Tesla robotaxi service. revelations: AI startup which recently announced plans to declare bankruptcy, faked business with the Indian social media startup VerSe Innovation for years to falsely inflate its sales, according to documents reviewed by Bloomberg and people with direct knowledge of the practice.
Indian Express
a day ago
- Business
- Indian Express
Builder.ai, DailyHunt parent VerSe faked revenue from sham deals as part of ‘round-tripping': Report
a London-based AI startup bound for bankruptcy, allegedly colluded with Indian social media startup VerSe Innovation to fabricate business deals and present artificially inflated sales figures to investors. The two companies regularly billed each other for nearly the same amounts even though neither of them actually provided the products and services in a practice known as 'round-tripping', according to a report by Bloomberg. is a platform used to build apps and software using AI with 'no tech knowledge needed.' In May this year, the company announced that it was planning to file for bankruptcy after lenders decided to seize most of its funds. Once valued at $1.5 billion, is one of the most prominent AI startups to fail amid an investment frenzy first sparked by the launch of ChatGPT in 2022. Its collapse serves as a stark reminder of the risks involved in rushing to back the next OpenAI or Anthropic. VerSe Innovation, on the other hand, is the Bengaluru-based parent company of popular news aggregator app DailyHunt, which reportedly has more than 350 million monthly users. Over four years, reported receiving nearly $60 million in revenue from VerSe for services such as app development. The AI startup, in turn, transferred funds to VerSe and its subsidiary, Quark Media Tech, for services such as marketing, as per the report. Although the transfers didn't happen at exactly the same time, both and VerSe received nearly the same amount from each other, Bloomberg reported. However, Umang Bedi, one of the co-founders of VerSe, has dismissed the allegations of round-tripping as 'absolutely baseless and false'. 'We're not the kind of company that is in the business of inflating revenues,' he was quoted as saying by the business news outlet. 'There is no correlation on any timing of any payment to any partner,' he added. VerSe's investors include Goldman Sachs and Google. In 2022, the startup raised $805 million from the Canada Pension Plan Investment Board and other investors at a $5 billion valuation. Meanwhile, has been backed by Microsoft, Insight Partners and the Qatar Investment Authority (QIA), one of the world's largest sovereign wealth funds. In 2023, Microsoft had announced that solutions would be integrated with its cloud and Teams. founder Sachin Dev Duggal exited the company in February this year. He was replaced by Manpreet Ratia as CEO. 'With no viable alternatives, the Board has made the extremely difficult decision to enter into insolvency,' Ratia reportedly wrote in an internal email a few months later.
Time of India
2 days ago
- Business
- Time of India
VerSe Innovation allegedly billed Builder.ai without services; Indian company denies claims
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Bengaluru-based VerSe Innovation , the parent firm of news aggregator platform Dailyhunt , and London-based artificial intelligence startup allegedly inflated revenue by issuing invoices to each other without services being provided in many of those cases, a Bloomberg report two companies routinely billed one another for roughly the same amounts between 2021 and 2024, the news agency reported citing documents it reviewed, adding that collected close to $60 million in revenue from VerSe in the four-year period for services such as application Innovation cofounder and CEO Umang Bedi , terming the allegations 'factually incorrect and baseless', told ET that the amount invoiced and accounted for as revenue in its financial statements by the company was against 'services that VerSe (or a relevant subsidiary) rendered and delivered to VerSe has accounted as an expense, in VerSe's financial statements, only for services that it in fact received from or its relevant subsidiary. All these services have also been verified from time to time by reputable external organisations,' he the nature of these services, Bedi said that provided cloud compute services to VerSe, which amounted to $80 million for the 2020-25 period. On the other hand, the London-based startup availed advertising services from VerSe for around $50 million during this 2021 and 2022, VerSe Innovation raised a total of about $1.5 billion in capital from marquee investors such as Canada Pension Plan Investment Board (CPP Investments), Ontario Teachers' Pension Plan Board (Ontario Teachers'), Luxor Capital, Sofina, The Carlyle Group, Alpha Wave, Google and is also a backer of which itself filed for bankruptcy in May after one of its large lenders seized most of its cash. This was preceded by the $1.5-billion valued startup's admission that it overstated its sales to creditors. In the US, prosecutors have also subpoenaed the company demanding that it hand over financial statements, accounting policies and a list of people in the know and documents, Bloomberg reported that the two companies appear to have interspersed the timing and amount of the invoices to avoid suspicion, though each firm ultimately spent approximately the same amount.'Any suggestion that and VerSe coordinated with one another to inflate sales figures or that they routinely billed one another for roughly the same amount or that products and services weren't actually provided against payments made or that there was a practice of reporting bogus revenue in coordination or that payments were intentionally interspersed in timing and amount of the invoices to avoid suspicion, are not only baseless and factually incorrect but also defamatory and irresponsible,' Bedi said on these VerSe Innovation, the reports of alleged 'round-tripping' of money with comes close on the heels of audit firm Deloitte flagging lack of 'appropriate internal controls' as part of its opinion on the company's 2023-24 financials. The Big Four firm weaknesses in internal controls over several aspects of VerSe Innovation's business, including its advertising revenue and relationship with gaps, Deloitte said, 'could potentially result in material misstatement' of VerSe Innovation's account. Bedi said that while 'weaknesses were noted in certain internal controls, the statutory auditors have clearly opined that these weaknesses 'do not affect our opinion on the said consolidated financial statements of the company''.In its annual financial statements for 2023-24, VerSe Innovation had updated its financials for the previous fiscal -- adjusting its total income to Rs 1,356 crore from Rs 1,809 crore filed with its 2022-23 statements. Deloitte had highlighted the changes in the figures reported for 2022-23, while also flagging an unsubstantiated claim of Rs 35 crore connected to unexplained invoices from a supplier which the company did not recognise as a trade payable. The company had said that the restatement in revenue for 2022-23 was because of adjustments made on account of adoption of Indian Accounting Standards
Time of India
2 days ago
- Business
- Time of India
Builder.ai-VerSe fake sales: All you need to know about the 'round-tripping' scandal
Artificial intelligence (AI) startup Builder. ai, which is filing for bankruptcy, has allegedly faked transactions with VerSe Innovation , the parent company of Dailyhunt, for several years to falsely boost its reported sales, according to a Bloomberg report. What happened Between 2021 and 2024, Builder. ai and VerSe Innovation reportedly exchanged invoices for similar amounts in a scheme known as 'round-tripping' , according to sources familiar with the matter. This practice involves moving money between companies without any real exchange of goods or services — purely to inflate revenue figures for investors. The Bloomberg report claims many of these transactions were for services that were never actually delivered by either company. VerSe responds Live Events Umang Bedi, cofounder of VerSe Innovation, dismissed the allegations, saying: 'It was absolutely baseless and false' to suggest that VerSe recorded expenses or billed for services it didn't receive or provide. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories 'We're not the kind of company that is in the business of inflating revenues,' Bedi said in an interview. The Deloitte audit Last month, ET reported that Deloitte, the auditor for VerSe, flagged serious internal control issues in the company's financial operations for the year ended March 31, 2024. The audit firm said these 'material weaknesses' could lead to errors in reporting expenses, trade payables and other accounts. Specifically, Deloitte pointed to gaps in how VerSe selects and evaluates suppliers, approves invoices and payments, and tracks its expenses. The firm also noted an 'unsubstantiated claim' of Rs 35 crore from a supplier, which VerSe hasn't recognised as a payable. Despite these concerns, Deloitte clarified that its opinion on VerSe's consolidated financials remained unchanged. In response, VerSe said it was working to tighten its internal processes. The company said that it is conducting a detailed workshop on the 'best practices and checklists' and aims to build a complete, well-documented system covering everything from supplier selection to payment approvals. Builder. ai files for bankruptcy Earlier this month, Builder. ai confirmed plans to file for bankruptcy after one of its key lenders, Viola Credit, seized $37 million from its accounts. This left the company with just $5 million in its reserves, according to CEO Manpreet Ratia. Reports by Bloomberg revealed that Builder. ai had overstated its 2024 projected sales to creditors by 300%. This led to increased scrutiny and the freezing of its funds. As a result, US prosecutors have issued a subpoena demanding detailed financial records and customer information from the company. Job cuts at both companies On 17 May, VerSe Innovation announced it was laying off 350 employees as part of its push to focus more on AI and reduce costs. This follows a previous round of layoffs, when 150 employees were let go in 2021. Meanwhile, as reported earlier, Builder. ai is also being forced to let go of most of its workforce due to a lack of available cash. According to Ratia, although the company still has $5 million in Indian bank accounts, restrictions on overseas remittances prevent it from paying its international employees. Founded in 2016, Builder. ai offered a platform to help businesses quickly build custom apps with little or no coding, positioning itself as a faster and simpler alternative to traditional app development. The startup attracted major investment, including $250 million in 2022 from QIA, a leading sovereign wealth fund. In 2023, Microsoft also became a strategic partner, investing in Builder. ai as part of a broader collaboration.
Bloomberg
3 days ago
- Business
- Bloomberg
Builder.ai Faked Business With Indian Firm VerSe to Inflate Sales, Sources Say
the artificial intelligence startup that recently announced plans to declare bankruptcy, faked business with the Indian social-media startup VerSe Innovation for years to falsely inflate its sales, according to documents reviewed by Bloomberg and people with direct knowledge of the practice. The two companies routinely billed one another for roughly the same amounts between 2021 and 2024, documents reviewed by Bloomberg show, as part of an alleged practice known as "round-tripping" that the people said used to inflate revenue figures it presented to investors. In many cases, products and services weren't actually provided to either company for these payments, said the people, who asked not to be identified discussing confidential information. Umang Bedi, a VerSe co-founder, said it was 'absolutely baseless and false' that his company would have recorded expenses or billed services that it didn't receive or provide. 'We're not the kind of company that is in the business of inflating revenues,' he said in an interview.
