Failed 2020

    ScaleFactor

    Claiming AI automation while secretly using manual labor is fraud.

    Founded → Closed

    2014 → 2020

    Funding Raised

    $100M

    Industry

    Fintech/Accounting

    Country

    USA

    IdeaProof AI Failure Score

    72/100
    Market Fit RiskBurn Rate RiskFounder Risk
    Market Fit Risk
    40
    Burn Rate Risk
    70
    Founder Risk
    75

    Full Analysis

    ScaleFactor raised $100M claiming AI-powered bookkeeping. In reality, much of the work was manual by offshore accountants. Forbes revealed significant errors and falsified statements. The company shut down in 2020.

    Could This Failure Have Been Prevented?

    IdeaProof's AI validates market demand, competitive positioning, and business model viability in minutes — catching the exact issues that sank ScaleFactor.