Bengaluru-based tech unicorn VerSe Innovation has strongly refuted claims of revenue manipulation and "round-tripping" with the now-bankrupt AI startup Builder.ai. The company, which owns popular apps Dailyhunt and Josh, termed the allegations "false, defamatory, and irresponsible," asserting the complete legitimacy of its $80 million worth of transactions with Builder.ai over the past three years.

Reports, including one by Bloomberg, accused Builder.ai of engaging in "round-tripping" – a practice of inflating revenues through reciprocal, non-service-backed transactions – to present an inflated financial picture to investors.Builder.ai, once valued at $1.5 billion, recently filed for bankruptcy after a creditor seized most of its cash, and is now facing a subpoena for financial records from U.S. prosecutors.

VerSe co-founder Umang Bedi dismissed the accusations as "factually incorrect and baseless" in an interview with Moneycontrol. He maintained that all recorded revenues and expenses with Builder.ai were for "legitimate services rendered and delivered," and were "duly received, delivered respectively and verified." Bedi provided evidence of the genuine business relationship, including email exchanges and Jira tickets dating back to 2021 when the two companies began their engagement.

The Bloomberg report suggested that between 2021 and 2024, Builder.ai recorded nearly $60 million in revenue from VerSe for services like application development, while simultaneously making payments to VerSe and its subsidiary, Quark Media Tech, ostensibly for marketing services. The timing and amounts of these invoices were reportedly varied, creating a nearly even financial exchange. However, Bedi explicitly denied any correlation in the timing of payments or any implication of collusion or non-delivery of services.

Builder.ai, founded by Sachin Dev Duggal who stepped down as CEO in February 2025, had raised over $450 million from investors including Microsoft, Insight Partners, and the Qatar Investment Authority. Notably, both Microsoft and QIA also backed VerSe.

Auditor Deloitte, in VerSe's most recent financial report, flagged weaknesses in the company’s internal controls but still signed off on the accounts. VerSe Innovation is reportedly exploring an Initial Public Offering (IPO).