VerSe Innovation denies revenue manipulation allegations amidst Builder.ai scandal
Bengaluru-based tech unicorn terms claims of round-tripping “false, defamatory and irresponsible”. It asserts legitimacy of $80 million transactions with Builder.ai.
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VerSe Innovation, the parent company of Dailyhunt and Josh, has come under scrutiny following allegations of revenue manipulation involving its dealings with Builder.ai, a UK-based AI startup. The two companies reportedly were engaged in "round-tripping"— a practice where companies inflate revenues by booking reciprocal transactions without actual services rendered. Builder.ai, which recently filed for bankruptcy, has been accused of using such tactics to overstate its revenues.
VerSe Innovation has now firmly denied these allegations, stating that it conducted legitimate business transactions worth $80 million with Builder.ai over the past three years. The company emphasized that all transactions were for actual services rendered, including software development and other technological solutions.
VerSe co-founder Umang Bedi told Moneycontrol that the accusations are “factually incorrect and baseless,”. He added that all revenues and expenses recorded in connection with Builder.ai were for “legitimate services rendered and delivered,” and “duly received, delivered respectively and verified.”
He also has shown email exchanges between Builder.ai and VerSe establishing the fact that the two had a business relationship and there were services rendered for which VerSe was billed, too. Bedi also went back to 2021, when Builder.ai and VerSe began engaging, to show all the Jira tickets that had been raised between the two companies.
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 VerSe Innovation, according to a report by Bloomberg.
Documents 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.
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.
Earlier this week, Builder.ai officially entered insolvency in the UK.
