Builder.Ai Faces Bankruptcy: A Deep Dive into the No-Code Giant’s Fall
London-Based Builder.Ai, once a shining star in the no-code/low-code and AI sectors, faces a dramatic downfall, declaring bankruptcy amidst allegations of financial impropriety and inflated valuations. This turn of events leaves investors, employees, and clients in a state of shock and uncertainty. The rapid descent of this promising start-up serves as a cautionary tale in the often-turbulent world of tech investment and innovation.
The Rise and Fall of Builder.Ai
Founded in 2016, Builder.Ai quickly garnered attention for its innovative platform designed to simplify software creation through AI-powered automation. Attracting investments from industry giants like Microsoft and The Qatar State Fund, the company reached an notable valuation of $1.5 billion.However, beneath the veneer of success, issues were brewing that would ultimately lead to its demise.
Sachin Dev Duggal, the entrepreneur behind Builder.Ai, pitched a compelling vision: a platform powered by an AI named Natasha, capable of automating app design and development, significantly cutting costs and timelines. This promise of radical simplification resonated with investors eager to capitalize on the burgeoning no-code/low-code market.
Did You Know? No-Code/Low-Code platforms are projected to represent over 65% of application development activity by 2024, according to Gartner.
The Unveiling of Operational Realities
In 2019, The Wall Street Journal cast doubt on Builder.Ai’s AI claims. The investigation highlighted the significant involvement of human developers in India, exposing a hybrid model that leaned heavily on manual labor rather than pure automation. This revelation,though raising eyebrows,did not immediately derail the company’s trajectory.
Through adept dialog, Builder.ai maintained investor confidence, securing further backing from The Qatar Investment Authority (QIA), Insight Partners, and Microsoft, which integrated the platform into its Azure ecosystem in 2023 through a strategic partnership. This endorsement from established players solidified Builder.ai’s reputation, earning it recognition as a leading innovator in AI by Fast company’s annual list of the World’s most Innovative Companies.
“Round-Tripping” and Inflated Revenue
despite the accolades and considerable investments, Builder.Ai struggled to translate its potential into sustainable profitability. Financial troubles mounted, exacerbated by allegations of “round-tripping,” a practice involving reciprocal accounting entries with Verse Innovation (parent company of Dailyhunt) to artificially inflate sales figures. Allegedly, sales were booked prematurely, even without finalized contracts.A law firm’s investigation revealed that the initial sales forecast for 2024 was slashed from $220 million to approximately $55 million, with similar downward revisions for 2023.
The Triggering of Default Clauses
These financial restatements triggered default clauses with Viola credit, from whom Builder.Ai had secured a $50 million loan. In May 2025, the debt fund seized over $37 million from the company’s accounts, citing breaches of contractual obligations related to financial reporting. With onyl $5 million in liquid assets remaining, largely inaccessible due to being held in Indian accounts, Builder.Ai’s ability to continue operations became untenable.
Facing a state investigation in the United States, Builder.Ai released a statement acknowledging its predicament, stating that despite the team’s best efforts, the company could not overcome “historical challenges and previous decisions” that placed immense strain on its financial situation. The immediate focus, thay affirmed, is on supporting employees, customers, and partners during this difficult period and exploring potential options for the company’s future.
The Implications for the No-Code/Low-Code Industry
Builder.Ai’s bankruptcy sends shockwaves through the no-code/low-code industry, raising questions about the sustainability of rapid growth fueled by venture capital and the importance of rigorous financial oversight. This event serves as a stark reminder that even companies with cutting-edge technology and high valuations are not immune to financial mismanagement and market pressures.
What lessons should the no-code/low-code industry learn from this situation? How can investors better assess the true potential and financial health of startups in this rapidly evolving sector?
| Date | Event |
|---|---|
| 2016 | Builder.Ai Founded |
| 2019 | Wall Street Journal Report on Human Developer Reliance |
| 2023 | Integration with Microsoft Azure |
| 2024-2025 | allegations of “Round-Tripping” and Financial Revisions |
| May 2025 | Viola Credit Seizes Accounts |
| June 2025 | Bankruptcy Filing |
The Future of No-Code/Low-Code Development
Despite the challenges faced by Builder.Ai, the no-code/low-code movement continues to gain momentum. The demand for rapid application development and digital transformation is driving increased adoption of these platforms across various industries. Moving forward, a greater emphasis on sustainable growth, clear financial practices, and realistic assessments of AI capabilities will be crucial for the long-term success of companies in this sector.
Pro Tip: When evaluating no-code/low-code platforms, consider factors such as scalability, security, integration capabilities, and community support, along with ease of use and initial cost.
Frequently Asked Questions
- What is Builder.Ai?
Builder.ai was a British startup specializing in no-code/low-code software development and artificial intelligence, aiming to simplify application creation. - Why did Builder.Ai file for bankruptcy?
Bankruptcy was triggered by allegations of dubious financial transactions, overvalued income, and an inability to convert investments into sustainable revenue. - What were the “round-tripping” allegations against Builder.Ai?
The company was accused of artificially inflating revenue through mutual accounting positions with Verse Innovation, booking sales before actual payments were received. - Who were some of the major investors in Builder.Ai?
Major investors included Microsoft and The Qatar Investment Authority (QIA). - how did Builder.Ai’s AI platform, Natasha, function?
Natasha was intended to automate the design and development of applications, reducing costs and time. However, reports indicated a significant reliance on human developers in India. - What was the impact of the financial revisions on Builder.Ai?
Revised sales forecasts led to a violation of contractual obligations with Viola Credit, resulting in the seizure of a significant portion of the company’s accounts. - What is the current status of Builder.ai?
Builder.Ai has initiated bankruptcy proceedings and is under investigation in the United States. Its immediate priority is to support its employees, customers, and partners.
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