Docs and sources: Builder.ai faked business with Bengaluru-based VerSe, which runs the Dailyhunt news app, by “round-tripping” sales worth ~$60M from 2021-2024
www.bloomberg.com/news/article... X: Nikhil Patwardhan / @patwardhannn : 🚨🚨 The Dailyhunt, Josh story seems to be unravelling quickly. Another Peak XV startup, among the most funded ones, seems to be having major governance and compliance issues. A quick thread on a series of events. Nikhil Patwardhan / @patwardhannn : A few weeks later VerSe formally filed its results with the MCA. And that report opened a can of worms A quick look at the red flags raised by Deloitte. Although the auditor signed off on the company's financials, it issued an adverse opinion on the company's internal controls. [image] Michael Jackson / @workmj : They faked it till they didn't make it. https://www.bloomberg.com/... Nikhil Patwardhan / @patwardhannn : In March, @thecaptableco reported that Deloitte, VerSe Innovation's auditor, delayed signing off on the company's FY24 annual report, as it raised certain red flags. Nikhil Patwardhan / @patwardhannn : But just a week after, Dailyhunt put out a media release saying Deloitte has given the company a clean chit and it is expecting a 75% growth in FY25. In the release, Dailyhunt also said that its revenue declined in FY24 and attributed the decline to “a slowdown in the ad market” Nikhil Patwardhan / @patwardhannn : 🚨🚨 https://builder.ai/, which filed for bankruptcy this month, was working with Dailyhunt and Josh parent VerSe Innovation to round tip revenue worth $60 million, Bloomberg reports. [image] Steven Tey / @steventey : no. freaking. way. someone actually did this IRL 😆 [image] LinkedIn: Taylor Hoekstra : In the earliest days of Popfly (>2 years ago), I strongly considered using builder.ai to get my mvp out the door... … Greg Kovacic : Another edition of “Do” Diligence: The not-so-curious case of round-tripping — “Round-tripping” involves Company #1 paying Company #2 for their products/services. … Mark Bergen : Wild new twist in this saga - now involves two unicorn startups that have raised money from Microsoft, Google, Goldman, Insight Partners, QIA, etc. #ai #startups #reporting Bismah Malik : One of the biggest startup frauds allegedly involving round tipping of revenues , sales inflation between Builder.AI and VerSe Innovation for last 4 years … Yazhou Sun : Scoop: Builder.ai routinely faked business with Indian startup VerSe Innovation to falsely inflate its revenue, sources tell Bloomberg. …
So what that's two companies engaged in straight up fraud Microsoft invested in here? How much due diligence are guys like Goldman Sachs and Google doing?
“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” — www.bloomberg.com/news/article...
🚨🚨 The Dailyhunt, Josh story seems to be unravelling quickly. Another Peak XV startup, among the most funded ones, seems to be having major governance and compliance issues. A quick thread on a series of events.
A few weeks later VerSe formally filed its results with the MCA. And that report opened a can of worms A quick look at the red flags raised by Deloitte. Although the auditor signed off on the company's financials, it issued an adverse opinion on the company's internal controls. […
In March, @thecaptableco reported that Deloitte, VerSe Innovation's auditor, delayed signing off on the company's FY24 annual report, as it raised certain red flags.
But just a week after, Dailyhunt put out a media release saying Deloitte has given the company a clean chit and it is expecting a 75% growth in FY25. In the release, Dailyhunt also said that its revenue declined in FY24 and attributed the decline to “a slowdown in the ad market”
🚨🚨 https://builder.ai/, which filed for bankruptcy this month, was working with Dailyhunt and Josh parent VerSe Innovation to round tip revenue worth $60 million, Bloomberg reports. [image]