Builder.ai was once a trailblazer in the tech industry. It set out with an ambitious mission to revolutionize the way software is built. It used artificial intelligence (AI) to help people create apps, even if they didn’t know how to code. The company gained momentum, attracting substantial venture capital and forming high-profile partnerships that positioned it as a formidable player in the no-code development space.
But behind this success, there were serious problems that eventually caused the company to collapse. This blog takes you through Builder.ai’s full journey, how it started, how it grew, what went wrong, and what we can learn from it.
Builder.ai was started in 2016 by Sachin Dev Duggal and Saurabh Dhoot. Their idea was simple: make it easy for anyone to build software.
They created a platform and claimed that they used both AI tools and humans. It worked like an assembly line. AI did most of the work, and human engineers stepped in to check and finish the job. They offered services like Builder Studio (to build apps), Builder Cloud (to host apps), and Builder Care (to provide support after the app was built).
This way of working helped users build software faster and at a lower cost. It was immediately a more attractive option for startups than having to pay to get their MVPs developed.
Because the idea was new and useful, Builder.ai quickly gained attention. In 2022, the company raised $100 million in a Series C funding round led by Insight Partners. Then, in 2023, it raised another $250 million in Series D funding led by the Qatar Investment Authority. In total, Builder.ai raised over $450 million from investors who believed in its mission.
The headline, though, was its partnership with Microsoft. The two companies worked together to bring Builder.ai’s app tools to Microsoft’s cloud platform, Azure. Builder.ai also added its AI assistant, Natasha, to Microsoft Teams. This helped people use Builder.ai’s tools directly from a platform they were already using for work.
This deal cemented Builder.ai as a strong player in the AI software space.
Backed by strong funding and major partnerships, Builder.ai began expanding its global footprint. New offices were established in the United States, the United Arab Emirates, Singapore, and France. This helped it reach more customers outside the UK.
Concurrently, Builder.ai kept making incremental improvements. One of its main goals was to let users create apps using simple instructions. Instead of using complex coding tools, users could type or speak in plain language. The system would then turn those ideas into working apps.
These innovations significantly lowered the barrier to entry, making the platform more accessible to a wider audience with little to no programming expertise.
Even though things looked great from the outside, serious problems were brewing behind the scenes.
An internal review found that Builder.ai had been claiming it made more money than it actually did. For example, in 2024, the company first said it earned $220 million. But this number was later corrected to just $55 million. In 2023, they claimed $180 million in revenue, but the real amount was only $45 million.
These changes upset lenders who had loaned hefty sums to Builder.ai. They said the company broke the rules of their agreement. Because of this, the company had to start the process of insolvency. In simple terms, it could not pay its bills anymore.
There were also doubts about Builder.ai’s use of AI. The company claimed most of the work was done by AI, but it turned out that nearly 700 engineers in India were doing much of the work by hand. This made people question whether the platform’s AI really did what the company said it could do.
Builder.ai also found itself entangled in a financial controversy involving VerSe Innovation, the parent company of the popular news app Dailyhunt. Both companies were accused of doing something called round-tripping. This means they created fake business deals to make it look like they were making more money than they actually were. These alleged arrangements gave the illusion of higher sales, potentially misleading the investors and stakeholders.
While VerSe Innovation publicly denied the allegations, the controversy cast a shadow over both companies. It not only damaged credibility but also sparked broader concerns about transparency and financial reporting within the startup ecosystem.
As the problems grew, the company’s leadership also began to change. In early 2025, Sachin Dev Duggal stepped down as CEO. However, he stayed on the company’s board and took the title “chief wizard.” Manpreet Ratia became the new CEO. He said he would focus on improving the company’s operations and building a more stable future.
At the same time, Duggal faced legal trouble in India. He was named in a money-laundering case linked to the Videocon Group. Duggal said he had done nothing wrong and would fight the case in court.
By May 2025, the situation was dire. One of the company’s lenders pulled out most of the money Builder.ai had in its bank accounts. Without this essential capital, the company couldn’t pay its workers or continue its normal operations.
As a result, Builder.ai laid off around 1,000 employees, about 80% of its staff, and entered formal insolvency.
After the company collapsed, Duggal said he wanted to buy it back, or at least take back the most important parts of it. He planned to do this using a special process called a pre-packaged insolvency. This process lets someone buy a company quickly without waiting for a long insolvency process.
But this plan ran into roadblocks. Most of Builder.ai’s technology was already used as a guarantee for its loans. There were also ongoing legal investigations. These problems made the buyback more difficult to carry out.
Builder.ai’s story teaches us some clear lessons about how to run a tech company.
Even with all the problems, Builder.ai introduced a compelling vision-combining AI with human expertise to make software more accessible. The idea itself had real promise.
However, the company’s collapse serves as a reminder that innovation is not enough. Long-term success requires transparency, measurable results, and strong leadership.
Builder.ai experienced rapid growth and appeared to have a bright future. Its mission to simplify software development for everyone was both ambitious and timely.
However, critical issues related to financial transparency, leadership, and trust ultimately led to its downfall.
This story is a strong reminder: even the most innovative ideas can fail if a company is not honest or careful. Startups, investors, and users should all pay attention to these lessons.
In the end, the tech industry thrives not only on bold innovation but also on the foundation of trust, ethical leadership, and responsible decision making.
1. What was Builder.ai?
Builder.ai was a company that helped people build apps using artificial intelligence (AI) and human engineers. It allowed non-technical users to create software easily without writing code.
2. Who founded Builder.ai?
The company was founded in 2016 by Sachin Dev Duggal and Saurabh Dhoot.
3. What was special about Builder.ai’s platform?
Builder.ai used a mix of AI and human support to build apps faster and at a lower cost. It had tools like Builder Studio, Builder Cloud, and Builder Care.
4. What went wrong with Builder.ai?
The company reported false revenue numbers, had unclear use of AI, and was involved in suspicious business deals. These issues led to a loss of trust and financial trouble.
5. Is Builder.ai still active?
The company went into insolvency, meaning it couldn’t pay its debts. It is no longer running in the same way it was before.
6. Was Builder.ai really using AI for most of its work?
No. Most of the work was done by around 700 human engineers in India. The role of AI was not as big as the company claimed.
...Loading Related Blogs
We have got the answers to your questions.
