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Foundation Robotics Faces Scrutiny Over GM Claims

Foundation Robotics Faces Scrutiny Over GM Claims

Foundation Robotics Labs, a startup co-founded by the CEO of the financially troubled fintech firm Synapse, has been soliciting investments in Silicon Valley with claims of strong ties to General Motors (GM), assertions that GM denies.

The startup, aiming to complete an $11 million seed funding round with a final $1 million, suggested in documents obtained by CNBC that GM had committed to investing and that Menlo Park-based VC firm Tribe Capital was also involved.

“Foundation is building human computers to take over tasks performed by people in factories, warehouses, and eventually homes,” the company stated.

The fundraising documents further claimed that GM would be Foundation’s first customer, with a projected $300 million purchase order, and that GM had granted access to its factories for robot training.

“GM agreed to let us gather real-world data in their facilities,” Foundation noted. “Our team is in their Mexico plant this week to begin the process. We could be the only company in this sector with such a database.”

Contradicting these claims, GM and an insider from the startup revealed that Foundation’s statements about GM are largely exaggerated or false. GM has met with Foundation executives but has not approved any data collection, made any orders, or planned any investment.

“GM has not invested in Foundation Robotics and has no plans to do so,” GM spokesperson Darryll Harrison stated via email. “In truth, GM has never had an arrangement of any kind with the company. Any claims to the contrary are fabricated.”

In a phone interview with CNBC, Foundation co-founder Mike LeBlanc confirmed GM’s stance and expressed embarrassment over the misleading marketing materials.

“The architectural work we’ve done is truly remarkable, and it’s the core of what this company represents,” LeBlanc said. “That, to me, is what Foundation Robotics is.”

Foundation Robotics was established in April by Synapse CEO Sankaet Pathak, Tribe Capital CEO Arjun Sethi, and LeBlanc, director of Cobalt Robotics. The startup’s fundraising efforts come as companies worldwide increase their investment in automation, with McKinsey predicting that 25% of capital spending by commercial firms in the coming years will be on automation systems.

The misleading fundraising pitch was distributed via an email group of approximately 1,500 startup executives and investors, according to a recipient. The document’s contents were confirmed by someone with direct knowledge of Tribe Capital. Both Tribe Capital and co-founder Sethi declined to comment, and Pathak did not respond to requests for comment.

This scrutiny on Foundation Robotics arises following the collapse of Pathak’s previous venture, Synapse. Founded in 2014, Synapse connected fintech brands like Mercury and Dave to FDIC-backed banks. It went bankrupt earlier this year after key clients left its platform over disputes regarding customer balances.

The bankruptcy has left over 100,000 Americans unable to access a combined $265 million in deposits for more than a month. Additionally, there is an $85 million discrepancy between the funds held by Synapse’s partner banks and what depositors are owed, with no clear explanation for the missing money, according to the bankruptcy trustee.

Pathak’s quick transition to Foundation Robotics amid the unresolved Synapse failure has raised concerns among startup founders and investors.