The ARR Mirage

When 11x raised $50 million at a $350 million valuation from venture capital firms Andreessen Horowitz and Benchmark, the US-based AI startup proudly touted nearly $10 million in annual recurring revenue (ARR).  But months later, investigations revealed that the actual figure was closer to $3 million. The company, critics alleged, had been counting short-term trial customers of three months as if they were locked into full-year contracts.  While 11x disputed the findings of the investigation, this fiasco brought to light a deeper problem plaguing startup finance.  ARR, once a straightforward measure of contractual commitments, has morphed into an ambiguous and at times manipulated metric in venture capital.  As AI companies race to demonstrate explosive growth,