Some startups are bold and original. And some, like Nate, had more modest goals: automatically filling out shoppers’ contact and payment information on retailers’ websites. In exchange for sparing them a minute or two of data entry on their phones, Nate charged shoppers $1 per transaction.

But it struggled to turn even that vision into reality. While the company said it was using artificial intelligence to populate customer information during the checkout process, it had actually hired workers in the Philippines to manually enter the data on retailers’ sites for a significant portion of the transactions Nate facilitated in 2021, according to two people with direct knowledge of the company’s practices. That meant customers’ orders were sometimes placed hours after they clicked the buy button through the Nate app. Nate didn’t disclose its decidedly low-tech methods to at least some of the investors from whom the startup tried to raise money, according to a person with direct knowledge of fundraising discussions.

Still, Nate has landed backing from well-known venture capital firms, including Coatue Management and Forerunner Ventures, who collectively invested more than $50 million in the startup over the past two years. Transaction volumes never took off, and late last year Nate offered a juicy promotion to get people to make purchases through the app: New customers could receive $50 to spend at select retailers like Best Buy and Walmart. But the move backfired when users discovered they could create multiple accounts, launching a feeding frenzy to collect the free cash, said two people with direct access to an internal transaction data dashboard. Customer orders surged during the promotion but tumbled back to pre-promotion levels when the company ended it around Christmas, these people said.