AI-powered sales automation startup 11x, backed by Andreessen Horowitz (a16z) and Benchmark, is facing serious allegations of misleading business practices. Reports indicate that the company has falsely claimed customers it does not have, including notable names like ZoomInfo and Airtable. Nearly two dozen sources, including investors and former employees, have revealed that 11x has encountered financial struggles, which they attribute largely to its own actions. The company allegedly counted trial users as full-year customers, inflating its annual recurring revenue (ARR) figures by four times. Additionally, there are claims of a toxic workplace culture and underwhelming product performance. 11x recently raised $50 million in Series B funding, but the allegations have prompted at least one company to threaten legal action over the misrepresentation of customer endorsements. The scrutiny surrounding 11x highlights broader concerns about the practices of AI startups in the rapidly evolving technology sector.
ARR vs CARR vs AR vs ERR vs NRR vs just revenues... 11x has certainly brought this debate back to the forefront. ARR= 12 month contract and billing has started CARR= 12 month contract, yet to start billing AR = monthly revenues X 12; often recurring but without contractual https://t.co/f7Lo9HNJ7o
WTF is ARR? And why / how is every AI startup claiming record breaking ARR? I teach you. Share this with your budding VC and start up friends. https://t.co/HaDZPz9wJ5
Unhappy customers, overnight shifts and an office punching bag: Inside the ‘toxic’ workplace culture at AI agents startup 11x. 👾 #AI #11x #Startups https://t.co/we4EK4KxoX