Baba Nadimpalli, founder and former CEO of artificial intelligence start-up SKAEL, pleaded guilty in federal court to securities fraud and wire fraud, according to the U.S. Attorney's Office, Northern District of California.
Nadimpalli, 42, an Australian citizen who previously resided in San Francisco, was indicted on Jan. 17, 2024. According to his plea agreement, he founded SKAEL in 2016 and served as CEO until July 2022. SKAEL, based in San Francisco, offered AI and automation software, generating revenue through implementation and subscription fees.
From January 2020 to February 2022, SKAEL raised over $40 million across three funding rounds. To attract investors, Nadimpalli provided false information about SKAEL’s customer and sales data, revenue, and annual recurring revenue (ARR). He misrepresented ARR, a key metric for investors, by claiming ARR from non-subscribing companies, overstating ARR from existing customers, and listing terminated subscriptions as current.
In February 2022, SKAEL raised approximately $30 million in a Series A preferred stock offering, valuing the company at around $230 million post-closing. Nadimpalli directed the creation of a data room for potential investors containing a spreadsheet with false ARR and customer data, misleading financial statements, and an investor presentation with false information about ARR, revenue, and customer adoption.
Nadimpalli also admitted to providing false bank account information, including purported customer payments that were never deposited, to an investor and a financial employee.
Nadimpalli is scheduled to be sentenced on Sept. 17, 2025, by Senior U.S. District Judge Charles R. Breyer. He faces a maximum of 20 years in prison and a $5 million fine for securities fraud, and 20 years in prison and a $250,000 fine for wire fraud. The U.S. Attorney’s Office and the FBI thanked the San Francisco Regional Office of the Securities and Exchange Commission for its assistance. Assistant U.S. Attorneys Noah Stern and Ilham Hosseini are prosecuting the case.