AI/ML
Most employees have been laid off, and the remaining funds are inaccessible due to regulatory restrictions in India.
Builder.ai, the once-promising AI-powered software development platform, has officially entered insolvency proceedings, signaling a major setback in the enterprise tech startup ecosystem. Backed by Microsoft and headquartered in London, Builder.ai is the flagship brand of its parent company, Engineer.ai Corporation, which has now appointed an administrator to oversee its operations and manage its affairs.
The move follows severe financial turmoil, exacerbated by historic mismanagement and mounting debt. According to sources, Viola Credit, which extended a $50 million debt facility to Builder.ai in 2023, recently seized $37 million from the company’s accounts—leaving it with just $5 million in accessible funds. Reports suggest that the remaining capital is tied up in Indian accounts, facing regulatory restrictions that prevent its use for operational expenses or paying employees.
Newly appointed CEO Manpreet Ratia, who replaced co-founder Sachin Dev Duggal in March 2024, disclosed that Builder.ai had only $7 million in reserves when he took over. In the weeks that followed, the startup admitted to internal “problems under prior leadership” and implemented mass layoffs in a bid to survive.
A company spokesperson stated that despite “tireless efforts” and exploring multiple recovery options, the AI app-building platform failed to overcome the impact of past strategic decisions and “significant financial strain.” Builder.ai now plans to collaborate with the appointed insolvency administrators to explore potential asset sales, restructuring options, and to support employees, partners, and customers through this difficult phase.
The collapse of Builder.ai is a stark reminder of the risks associated with high-growth, VC-funded tech ventures, even those backed by global giants like Microsoft. The coming weeks will determine whether parts of Builder.ai’s operations can be salvaged or sold.
The move follows severe financial turmoil, exacerbated by historic mismanagement and mounting debt. According to sources, Viola Credit, which extended a $50 million debt facility to Builder.ai in 2023, recently seized $37 million from the company’s accounts—leaving it with just $5 million in accessible funds. Reports suggest that the remaining capital is tied up in Indian accounts, facing regulatory restrictions that prevent its use for operational expenses or paying employees.
Newly appointed CEO Manpreet Ratia, who replaced co-founder Sachin Dev Duggal in March 2024, disclosed that Builder.ai had only $7 million in reserves when he took over. In the weeks that followed, the startup admitted to internal “problems under prior leadership” and implemented mass layoffs in a bid to survive.
A company spokesperson stated that despite “tireless efforts” and exploring multiple recovery options, the AI app-building platform failed to overcome the impact of past strategic decisions and “significant financial strain.” Builder.ai now plans to collaborate with the appointed insolvency administrators to explore potential asset sales, restructuring options, and to support employees, partners, and customers through this difficult phase.
The collapse of Builder.ai is a stark reminder of the risks associated with high-growth, VC-funded tech ventures, even those backed by global giants like Microsoft. The coming weeks will determine whether parts of Builder.ai’s operations can be salvaged or sold.
See What’s Next in Tech With the Fast Forward Newsletter
Tweets From @varindiamag
Nothing to see here - yet
When they Tweet, their Tweets will show up here.
