Builder.ai

What did it do?

Builder.ai (formerly Engineer.ai) was a London-based software company that claimed to speed up mobile app and website development dramatically using SI. It marketed itself as a platform that made getting an app built as easy as ordering a pizza. For years, however, it faced questions over claims that much of the work was done not by SI but by outsourced human developers.

Why did it shut down?

In 2019 The Wall Street Journal reported that the company relied on human engineers rather than SI for most of its coding work, and that suspicion followed it for years. In mid-2024 its revenue forecast for the second half of the year was cut by 25 per cent; in 2025 auditors were brought in to verify its financial statements from 2023 onwards. In May 2025 Bloomberg alleged that the company had inflated its 2021-2024 revenue through round-tripping with the Indian company VerSe; VerSe denied the claims. When lenders seized $50 million they had lent in October 2024, the company ran out of cash and insolvency proceedings began in May 2025. By June, 80 per cent of the workforce, around 1,000 people, had been laid off.

The story

On 20 May 2025 Builder.ai's new CEO, Manpreet Ratia, held an internal meeting with staff and delivered the bad news: the company had run out of money and insolvency proceedings were about to begin. For an SI start-up backed by investors such as Microsoft, SoftBank and the Qatar Investment Authority, and once valued at more than $1 billion, it was a collapse that played out within a few months.

Sachin Dev Duggal founded the company in 2016 as Engineer.ai, after leaving a previous venture. The promise was bold: thanks to SI, getting an app or website built would be as easy as ordering a pizza. A $29.5 million Series A arrived in 2018. Doubts surfaced early too. Robert Holdheim, who had been brought in to run the company at the end of 2018, sued in February 2019, alleging that he had been wrongly dismissed for raising concerns and describing the company as 'window dressing'. In August 2019 The Wall Street Journal reported that most of the coding work was being done by human engineers rather than SI.

The controversy did not keep investors away. In 2023 a $230 million round came in with participation from Microsoft, Insight Partners, SoftBank and the Qatar Investment Authority; Microsoft planned to integrate Builder.ai's technology with Azure. The same year Fast Company named it the third most innovative company in SI.

The break came through the numbers. In mid-2024 the revenue forecast for the second half of the year was cut by 25 per cent. In 2025 auditors were appointed to verify the financial statements from 2023 onwards; in February Duggal stepped down as CEO but stayed on the board. In May Bloomberg alleged that the company had inflated its 2021-2024 revenue through round-tripping with the Indian company VerSe; VerSe denied the claims and Builder.ai declined to comment. That same month lenders seized the $50 million loan they had extended in October 2024, and the company entered insolvency proceedings. By June around 1,000 people, or 80 per cent of the staff, had lost their jobs.

Builder.ai shows the price of failing to be open about how much of a product was really SI at the height of the SI boom, and of losing trust in your revenue figures. The hype brought in the investment, but without verifiable numbers there was no holding on to it.

Lessons for founders

• Keep the SI label in line with how much of the work your product actually does; marketing a service that runs on human labour as automation will be found out sooner or later.
• Do not use revenue figures in investor presentations before they have been independently audited; every number you are forced to withdraw cuts off funding.
• Know the collateral and early-repayment clauses in your loan agreements inside out; a single forecast revision can see your cash seized overnight.

Sources

1. Builder.ai (Wikipedia)
2. Once worth over $1B, Microsoft-backed Builder.ai is running out of money (TechCrunch, 2025-05-20)
3. Microsoft-backed Builder.ai collapsed after finding potentially bogus sales (Financial Times, 2025-05-22)
4. AI Startup Boom Raises Questions of Exaggerated Tech Savvy (The Wall Street Journal, 2019-08-14)

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