Builder.ai, the embattled AI software startup now undergoing insolvency proceedings, allegedly faked business transactions with VerSe Innovation, owner of popular local language content platform Dailyhunt, to artificially inflate its revenue, according to a Bloomberg report citing internal documents and sources familiar with the matter.
Between 2021 and 2024, the two companies routinely billed each other for similar amounts, with no actual services or products exchanged, according to the report. This alleged “round-tripping” was used to mislead investors about Builder.ai’s sales performance.
Once celebrated as a tech unicorn after a $250-million funding round led by the Qatar Investment Authority (QIA) in 2023, Builder.ai has rapidly unravelled due to financial mismanagement and governance lapses.
It first came under fire in 2019 when The Wall Street Journal revealed that most of its coding work was being carried out by human engineers, despite the company’s core strategy of using AI tools to help clients build and develop applications.
Fast forward to 2025, the crisis deepened, prompting major investors Jungle Ventures and QIA to intervene to rescue the company. Their response included aggressive cost-cutting measures, a leadership shake-up, and a push to revamp the company’s sales strategy.
As part of this overhaul, Jungle Ventures appointed one of its executives, Manpreet Ratia, as CEO of Builder.ai in February, thereby replacing Sachin Dev Duggal. The venture capitalist also brought in an independent auditor to scrutinise the company’s financials. According to a Bloomberg report, the audit at that time revealed that actual revenue for 2024 had fallen to around $50 million, far below earlier reported figures.
The report also draws scrutiny to VerSe, best known for its news aggregator Dailyhunt and short video app Josh, launched after India banned TikTok. In 2022, VerSe raised $805 million from investors including the Canada Pension Plan Investment Board, Goldman Sachs, and Google, valuing the company at $5 billion.
Top five funds on VerSe’s Cap table
