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A humanoid robotics startup, co-founded by the CEO of bankrupt fintech firm Synapse, has canvassed Silicon Valley investors for money by demanding close relationships and imminent investment from… General Motors – Claims rejected by the automaker.
The company, called Foundation Robotics Labs, is seeking the last $1 million in funding for an $11 million seed round, according to documents obtained by CNBC. The investor in the pitch claimed that GM has already committed to investing, along with Menlo Park-based venture capital firm Tribe Capital.
“The enterprise is building humanoid robots to take over the work done by humans in factories, warehouses and eventually homes,” the startup announced.
On top of the initial investment, the fundraising document said General Motors was the foundation's first customer, with a targeted purchase order of $300 million, and also provided access to its factories to help it train its robots.
“General Motors has agreed to allow us to collect ground truth data at its plants,” the organization said in the document. “Our team is at their factory in Mexico this week to begin the assembly process. We are probably the only company in this space that has a data set like this.”
“Fabricated” allegations.
But, according to General Motors and one of the startup's founders, most of the organization's claims about the automaker are exaggerated or untrue.
While GM has met with the organization's executives several times, it has not authorized data collection from its plants, does not have agreements for robot orders and does not plan to invest, according to a GM spokesman.
“GM has never invested in Foundation Robotics and has no plans to do so,” company spokesman Darrell Harrison said in an email statement. “In fact, GM had no agreement of any kind with the company. Any claims to the contrary are fabricated.”
In a phone interview with CNBC, Mike LeBlanc, one of the foundation's founders, corroborated GM's points and said he was embarrassed by marketing materials that overstated their relationship.
“The engineering stuff we've done is really amazing, and it's the cornerstone of what this company is going to be,” LeBlanc said. “That to me is what the Robotics Foundation represents.”
New institution
The foundation was started in April by Synapse CEO Sanket Pathak, Tribe Capital CEO Arjun Sethi, and LeBlanc, co-founder of Cobalt Robotics, a manufacturer of autonomous security guards, according to the company's fundraising plan.
It's raising money at a time when US companies are looking to automate more of their workers: 25% of capital spending by industrial companies in the coming years will be on automated systems, according to McKinsey.
The misleading fundraising pitch was shared in an email group with about 1,500 startup executives and investors this month, according to one recipient. The contents of the document have been confirmed by a person with direct knowledge of Tribe Capital.
Tribe Capital and its co-founder Sethi declined to comment, while Pathak did not respond to messages seeking comment.
Fintech collapse
The robotics startup finds itself in the spotlight following the implosion of another Pathak company, Synapse, which has empowered fintech brands like Mercury and… Dave To provide banking services by linking them with FDIC-backed banks.
Founded by Pathak in 2014, Synapse went bankrupt earlier this year after some of its largest clients, including Mercury, left its platform amid disputes over customer balances.
The chaos has left more than 100,000 Americans with a combined $265 million in deposits locked in their accounts for more than a month, according to a trustee appointed to oversee the company's bankruptcy proceedings.
To make matters worse, there is an $85 million shortfall between what Synapse's partner banks hold and what depositors are owed, and there are no answers yet about what happened to the missing funds, according to the trustee.
Pathak's move to his next venture, in the wake of Synapse's still-ongoing failure, has raised eyebrows among some founders and investors in the startup community.
