May 22nd.U.K.science and technologyStartups Builder.ai Announcement of entrybecome impoverishedprogram, which had been one of the most funded tech startups in the UK.
Builder.ai is a London-based company focused on streamlining the app and website development process using artificial intelligence technology. The company has claimed that its technology can make the development process "as easy as ordering a pizza" and has been backed by top investors including Microsoft and Qatar's sovereign wealth fund, raising more than $500 million (note: RMB 3.601 billion at current exchange rates).
Builder.ai informed employees during a company-wide conference call on Tuesday that the company is filing for bankruptcy. The company confirmed to the Financial Times that its main subsidiary, Engineer.ai Corporation, "will commence bankruptcy proceedings and an administrator will be appointed to manage the company's affairs."
Earlier this year, founder Sachin Dev Duggal resigned as CEO, but retained his seat on the board of directors and assumed the role of 'Chief Wizard', and in April, the company's new CEO Manpreet Ratia said the company had reduced its revenue to $140 million in 2023 and lowered its revenue forecast for the second half of 2024 by 25%. In April, the company's new CEO, Manpreet Ratia, said the company had lowered its 2023 revenues to $140 million and lowered its revenue forecast for the second half of 2024 by $25%.
According to insiders, Ratia said at an all-hands meeting on Tuesday that the company's financial position has deteriorated significantly due to historical legacy issues and past decisions and is beyond recovery. In addition, the company's major creditors have placed the company in default and frozen its cash reserves.
Ratia also said that although the company had secured $50 million in debt financing last October and raised a further $75 million to repair its balance sheet when he joined the company in March this year, it was still facing huge debts, including $85 million owed to Amazon and $30 million to Microsoft. He revealed that the company had almost run out of cash in its UK and US accounts, and when he tried to transfer funds from a Singapore bank account to pay staff, the funds were frozen by creditors, leaving the company unable to make payroll.
As previously reported by the Financial Times, Duggal had come under scrutiny in connection with a high-profile criminal investigation involving India, and he has faced multiple other legal disputes. These incidents have negatively impacted the company's reputation and operations, despite Duggal's insistence that he committed no wrongdoing in the India case and his attorney's statement that he was only a witness.
A preliminary report on the company's internal investigation was filed last week and covers the company's past financial behavior, said a person familiar with Builder.ai.