ScaleFactor promised small businesses a smarter way to handle finances — using AI to automate accounting. It raised $100M in a short span and was valued at $360M. But under the hood, many tasks were done manually by humans. Clients reported wrong numbers, billing issues, and poor support. Trust eroded. When COVID hit and SMBs started cutting costs, ScaleFactor used the pandemic as an exit narrative. But insiders confirmed the startup was already in free fall — high churn, inflated claims, and a product that never lived up to the pitch. It shuttered in mid-2020.

Pitch: “AI-powered bookkeeping for small businesses.”