Builder.ai accused of faking millions in sales through Dailyhunt-owner VerSe dealings

Builder.ai, a once high-flying artificial intelligence startup based in London, allegedly engaged in a years-long scheme to inflate its revenue by exchanging matching invoices with Dailyhunt-owner VerSe Innovation, according to a report by Bloomberg.

Documents reviewed by Bloomberg and people familiar with the matter suggest that between 2021 and 2024, the two firms routinely billed each other for similar amounts without providing actual services, a practice known as “round-tripping.” The transactions reportedly helped Builder.ai present an inflated financial picture to investors.

During the four-year period in question, Builder.ai reportedly recorded close to $60 million in revenue from VerSe for services such as application development. Simultaneously, the AI firm made payments to VerSe and its subsidiary, Quark Media Tech, ostensibly for marketing services. The timing and amounts of the invoices were varied, according to sources, but the net result was a nearly even financial exchange.

VerSe co-founder Umang Bedi denied the allegations, calling them “baseless and false,” and said the company did not record or pay for services it did not receive. VerSe also owns the short-video platform Josh.

Bedi, who previously served as Facebook’s managing director for India and South Asia, confirmed that VerSe began working with Builder.ai around 2021. However, he rejected any implication of collusion or non-delivery of services. “There is no correlation in the timing of any payments,” he said.

Once valued at $1.5 billion, Builder.ai filed for bankruptcy earlier this month after a creditor seized most of its cash. U.S. prosecutors have subpoenaed the company for financial records amid ongoing scrutiny. The founder and former CEO of Builder.ai is Sachin Dev Duggal. He stepped down as CEO in February 2025 but retained his position as "Chief Wizard" and remained on the board.

Builder.ai raised over $450 million from investors including Microsoft, Insight Partners and the Qatar Investment Authority. Microsoft and QIA, which also backed VerSe, declined to comment to Bloomberg.

Auditor Deloitte, in VerSe’s most recent financial report, flagged weaknesses in the company’s internal controls, though it signed off on the accounts, as per the report. The company, which owns the popular apps Dailyhunt and Josh, is said to be exploring an IPO.

The full details were first reported by Bloomberg.