Fraud Charges Surface: 11x Accused of Overstating Revenue and Misusing Logos

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Last year, AI-powered sales automation startup 11x appeared to be on an explosive trajectory. Founded in 2022 by CEO Hasan Sukkar, the company raised a $24 million Series A led by Benchmark, followed just a few months later by a $50 million Series B led by Andreessen Horowitz (a16z).

In press materials and on its website, 11x touted $10 million in annual recurring revenue (ARR) just two years after launching. Yet nearly two dozen sources—including investors, current and former employees—tell us that behind the scenes, 11x is plagued by high churn, inflated metrics, and mounting legal concerns about unauthorized customer logos and questionable accounting.

A Rise Fueled by AI Hype

11x is part of the burgeoning field of AI “sales development representatives,” or AI SDRs, promising to replace cold outreach functions with automated bots. In theory, 11x’s solution identifies prospective customers, crafts personalized email and phone scripts, then schedules meetings. One of its touted differentiators was the ability to detect company “intent signals”—for instance, if a firm is hiring sales staff and might need a new sales tech product.

Although 11x initially drew interest within the AI community, its approach appears to have floundered in a market overwhelmed by cold email. The mass proliferation of automated outreach—driven by easy-to-use tools like Instantly, Lemlist, and Porkbun—means inboxes are flooded with AI-personalized sales messages. As a result, email deliverability has nosedived across Google and Outlook, and even the emails that do arrive see sharply reduced effectiveness. Against this backdrop, 11x and other AI “Sales Agent” platforms have found it increasingly difficult to convert trial users into long-term customers.

Accusations of Overstated ARR

Former employees allege 11x overstated its ARR by counting the entire value of year-long contracts—even when those deals included a three-month break clause that allowed customers to opt out penalty-free. In reality, many customers never renewed after the break clause, citing disappointing email performance or “hallucinations” (bogus or irrelevant AI-generated messaging).

Three current and former 11x workers say that the majority of early customers—70 to 80 percent—ultimately discontinued using the product. Despite this, the company continued publicly reporting ARR figures as if those customers were still under full-year contracts.

Logo Disputes and Legal Threats

Alongside questions about its finances, 11x is also accused of falsely advertising certain high-profile companies as customers. At one point, 11x’s website prominently featured logos for ZoomInfo and Airtable—both of which claim they never signed on as paying customers.

ZoomInfo, confirms that it conducted only a one-month trial of 11x’s product but a spokesperson says the performance was “significantly worse” than the company’s human SDR employees, and declined to move forward.

“We did not give them permission to use our logo, and we are not a customer,” says a ZoomInfo spokesperson. “We spent the past four months demanding they stop displaying our logo and falsely counting us as a customer.”

Similarly, Airtable’s logo appeared on the 11x website until recently. Airtable also ran a “very short” trial, decided it wasn’t a fit, and never gave 11x permission to publicly claim them as a customer. “It was never used in production and never rolled out to our sales team,” an Airtable spokesperson says.

The repeated use of these logos has prompted speculation that Andreessen Horowitz—which denies it is suing 11x—might be weighing legal or other remedies. A spokesperson for a16z emphatically denied they are currently pursuing legal action.

As for a16z, the firm’s founder-friendly reputation typically leads them to champion, rather than sue, their portfolio CEOs. Still, the swirling speculation that even a16z considered legal recourse—no matter how strenuously they deny it—points to the severity of the concerns. “One day, there will be a documentary about this guy,” says a current employee who remains skeptical of the company’s leadership. “That’s how scandalous it is.”

A Toxic Work Culture?

To make matters worse beyond external churn, there are internal concerns. Sources provided messages showing Sukkar chastising or threatening employees in public Slack channels if they aren’t immediately available at late hours of the night. Two separate employees claim that raising concerns or pushing back on demands can result in threats of termination.

One former employee says they’re still awaiting back pay. Another current worker explains that many at 11x will resign right after payday to avoid losing wages. “We just got paid today,” the employee notes. “I’m expecting a couple of people to resign over the weekend or on Monday.”

Larger Industry Trends

The upheaval at 11x is not an isolated incident. Several other AI SDR startups have experienced similarly high churn.

In one particularly brazen example, a different AI sales agent startup, Artisan AI, is rumored to be counting early equity raised as part of its ARR calculation—a wildly fraudulent behaviour.

Note: I’d like to be very transparent. Artisan has advertised on this newsletter through an ad network. At the time I had no knowledge of this but will never accept another advertisement from them. While it may have a functional product, we can’t continue to endorse a tool shrouded in allegations of misleading practices.

Not all entrants in the AI-powered sales or enrichment space are facing these problems, however. Startup Clay—which positions itself less as a full SDR replacement and more as a spreadsheet-like enrichment tool—appears to be thriving.

Clay automates tasks such as gathering recent contact details for leads and scraping the web for personal interests or locations. The company raised from Sequoia, reported $5 million in ARR, and then secured a valuation bump to $1.3 billion from Meritech.

Where Does 11x Go From Here?

Despite the headwinds, some of 11x’s customers do seem legitimately engaged. Corporate credit card startup Rho and the European spend-management platform Pleo both confirmed they still work with 11x. But the churn rate, the controversies over unauthorized logos, and the mounting employee complaints paint a troubling picture.

If 11x is to weather the storm, it will have to reckon with the reality of cold-email oversaturation, reconcile its inflated metrics with investor expectations, and address the toxic work environment employees describe. For now, 11x remains emblematic of an AI sales industry that soared on big promises—and now faces a sobering test of credibility.