Robotics startup co-founded by Synapse CEO raises money with exaggerated GM claims

A humanoid robotics startup co-founded by the CEO of bankrupt fintech company Synapse has asked Silicon Valley investors for money by claiming close ties and an upcoming investment from General engines – claims rejected by the car manufacturer.

The company, called Foundation Robotics Labs, is seeking the final $1 million in funding for an $11 million seed round, according to documents obtained by CNBC. The investor pitch claimed that GM had already committed to an investment, along with the Menlo Park-based VC firm Tribal capital.

“The Foundation is building humanoid robots to take over the work people do in factories, warehouses and ultimately homes,” the startup said.

In addition to the seed investment, the fundraising document stated that GM would become the Foundation’s first customer, with a target purchase order of $300 million, and had also granted access to its factories to help them train their robots.

“GM agreed to let us collect the ground truth data at their facilities,” the Foundation said in the document. “Our team is at their factory in Mexico this week to start the collection process. We would probably be the only company in this space with a data set like this.”

But according to GM and one of the startup’s founders, most of the Foundation’s claims regarding the automaker are exaggerated or untrue.

Although GM has spoken with Foundation executives a few times, it does not allow data collection from its factories, has no agreements for robot orders and is not planning any investment, a GM spokesman said.

“GM has never invested in Foundation Robotics and has no plans to do so,” spokesman Darryll Harrison said in an emailed statement. “In fact, GM has never had an agreement of any kind with the company. Any claims to the contrary are fabricated.”

In a phone interview with CNBC, one of the Foundation’s co-founders, Mike LeBlanc, corroborated GM’s points and said he was embarrassed that marketing material existed that exaggerated their relationship.

“The engineering stuff we’ve done is really incredible, and it’s the foundation of what this company will be,” LeBlanc said. “To me, that’s what Foundation Robotics is.”

Foundation was founded in April by Sankaet Pathak, CEO of Synapse, CEO of Tribe Capital Arjun Sethiand LeBlanc, co-founder of Cobalt Robotics, a maker of autonomous security guards, according to the company’s fundraising pitch.

It is raising money at a time when US companies are looking to automate more of their labor: 25% of capital expenditures by industrial companies in the coming years will be spent on automated systemsaccording to McKinsey.

According to one of the recipients, the misleading fundraising pitch was shared this month in an email group with about 1,500 startup executives and investors. The contents of the document were confirmed by someone with direct knowledge of Tribe Capital.

Tribe Capital and co-founder Sethi declined to comment, while Pathak did not respond to messages seeking comment.

The robotics startup has been in the spotlight following the implosion of Pathak’s other company, Synapse, which saw fintech brands like Mercury and Daaf to provide banking services by connecting them to FDIC-backed banks.

Synapse, co-founded by Pathak in 2014, filed for bankruptcy earlier this year after some of its largest customers, including Mercury, left the platform over disagreements over customer balances.

The mess has left more than 100,000 Americans with a total of $265 million in deposits locked out of their accounts for more than a month, according to a trustee appointed to oversee the company’s bankruptcy proceedings.

Making matters worse, there is an $85 million shortfall between what Synapse’s partner banks hold and what depositors owe, and there are no answers yet about what happened to the missing funds, the trustee said.

Pathak’s move into his next venture, following the ongoing Synapse failure, has raised eyebrows among some founders and investors in the startup community.