Builder.ai Faces Financial Trouble: From $1B Valuation to Running Out of Funds

Builder.ai Initiates Insolvency Proceedings

Builder.ai, an artificial intelligence software firm, has begun insolvency proceedings, as verified by a company representative to TechCrunch.

The company, a unicorn backed by Microsoft and having secured over $450 million in funding, gained recognition for its AI-driven platform.

Appointment of Administrators

The platform was designed to streamline the development of applications and websites. According to the spokesperson, Builder.ai, also operating as Engineer.ai Corporation, is in the process of appointing an administrator to oversee the company’s operations.

The company released a statement acknowledging that, despite dedicated efforts from its team and a thorough examination of all viable alternatives, it has been unable to overcome longstanding difficulties and previous choices that severely impacted its financial stability.

Prioritizing Stakeholders

“Our primary focus currently is to provide support to our employees, clients, and partners during this challenging period,” the statement continued. “We will collaborate closely with the appointed administrators to guarantee a structured process and investigate all potential avenues for portions of the business, where feasible.”

Recent Challenges and Financial Concerns

Over recent months, Builder.ai has experienced significant changes in leadership and encountered financial difficulties. Reports surfaced in March indicating a 25% reduction in the company’s projected revenue for the latter half of 2024, a revision made during the previous summer.

In February, a new CEO, Manpreet Ratia, was appointed to lead the organization.

Financial Scrutiny and Allegations

The engagement of auditors to review the company’s financial records signaled potential discrepancies. Bloomberg reported that former employees have alleged instances of inflated sales figures, exceeding 20% on multiple occasions.

Past Controversies

Prior to the rebranding from Engineer.ai to Builder.ai, the company faced scrutiny. While Engineer.ai promoted a highly automated app development platform, investigations by The Wall Street Journal revealed a substantial reliance on human engineers.

The platform’s automation claims were, therefore, largely overstated.