Welcome to the Backstage with Millionaires weekly Indian startup news show, hosted by Caleb Friesen. This week, Builder AI files for bankruptcy amid a $60 million fake transaction scandal that VerSe Innovation was allegedly involved in, India AI Mission CEO urges AI startups to go global, Zepto delays its IPO to 2026 following financial and regulatory setbacks, WazirX sets up in Panama after Singapore rejects its restructuring plan, Fractal AI Research unveils a $499 model that beats OpenAI on math reasoning, and Indian startups raise $193 million.
0:00 Allegations Swirl About Fake Deals Between VerSe Innovation and Builder AI
3:30 Indian AI Startups Need Global Vision: India AI Mission CEO
4:58 Fractal AI Research Fathom-R1-14B
6:56 Zepto Delays IPO
8:46 Wazirx Sets up Shop in Panama
10:42 Quick News Items
11:13 Indian Startup Funding News
Allegations Swirl About Fake Deals Between VerSe Innovation and Builder AI
Builder AI, once valued at $1.5 billion, has filed for bankruptcy amidst allegations that it inflated sales by 300%. Now, VerSe Innovation, the company behind Dailyhunt and Josh, is reportedly linked to $60 million in fake transactions with Builder AI. A Bloomberg report claims VerSe Innovation and Builder AI engaged in round-tripping—exchanging fake invoices for non-existent app development and ad services between 2021 and 2024. VerSe Innovation CEO Umang Bedi denies the claims, stating they provided $80 million in legitimate services. However, VerSe Innovation’s auditor Deloitte flagged severe internal issues, including a mysterious ₹35 crore invoice and weak supplier and expense controls. Both VerSe Innovation and Builder AI are backed by Microsoft, Goldman Sachs, Peak XV, and Z47, raising questions about investor oversight.
Indian AI Startups Need Global Vision: India AI Mission CEO
Abhishek Singh, CEO of the India AI Mission, emphasized the need for Indian AI startups to think globally. At the Accel AI Summit, Singh said companies like Sarvam AI, Soket AI Labs, Gnani.ai, and Gan.ai must develop globally competitive large language models. While government backing helps, long-term success hinges on creating products that go beyond India. Singh noted that Indian startups have an edge in cost-efficiency and localization, especially in voice-based AI for sectors like healthcare and education. Accel’s Prashanth Prakash added that Indian frugality could disrupt global AI markets.
Zepto Delays IPO
Zepto has postponed its IPO to 2026 to reduce its cash burn and improve profitability. Moneycontrol reports that despite doubling revenue from ₹2,025 crore in FY23 to ₹4,454 crore in FY24, Zepto’s losses only slightly decreased from ₹1,272 crore to ₹1,248 crore. Deepinder Goyal of Zomato previously claimed Zepto accounted for over half the industry’s ₹5,000 crore quarterly cash burn. Zepto's Aadit Palicha denied this, but concerns persist. Compounding issues, Zepto's Dharavi warehouse lost its food license due to safety violations, and Zepto Cafe shut down in Agra and Chandigarh.
Wazirx Sets up Shop in Panama
WazirX, which lost $235 million in a cyberattack, had its restructuring plan rejected by Singapore’s High Court. The proposal aimed to return 52% of user losses from the remaining $284 million. But the court ruled that Zettai, WazirX’s Singapore-based entity, has no legal standing over Indian users since it operates separately from Zanmai Labs in India. In response, WazirX has now registered Zensui Corporation in Panama to bypass tighter Singaporean crypto laws. Millions of Indian users still cannot access their funds as WazirX appeals the decision.
Fractal AI Research Fathom-R1-14B
Fractal AI Research has developed Fathom-R1-14B, a reasoning model trained for just ₹43,000 (~$499), that outperforms OpenAI’s o1-mini and o3-mini on mathematical benchmarks.
Quick News Items
BigBasket joins the 10-minute delivery race in Bengaluru, partnering with Starbucks and Tata’s Qmin platform.
Zerodha CEO Nithin Kamath forecasts a 10–20% dip in broking revenue this quarter but reaffirms no plans for an IPO, with Zerodha aiming to become a full-fledged financial services firm.
Indian Startup Funding News
This week, Indian startups raised $193 million.
Udaan raised $114 million in its Series G round.
Stable Money secured $20 million to simplify FD investments across 200+ banks.
Handpickd raised ₹21.7 crore ($2.52 million) to personalize online fruit and veggie shopping.
Spense raised $1.85 million for Morph, its no-code fintech deployment platform.
Gully Labs raised ₹8.7 crore ($1 million) to blend Indian tradition with sneaker culture.
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