The Rise and Fall of Builder.ai — A $1.3 Billion Cautionary Tale

Builder.ai, once hailed as a revolutionary AI-driven software development platform, has collapsed. Its downfall offers important lessons for investors, founders, and the entire tech industry.

History & Founders

Founded: 2016 (originally named Engineer.ai)

Founder: Sachin Dev Duggal, a serial tech entrepreneur who began his journey at age 14. Before Builder.ai, he co-founded Nivio, a cloud computing company.

Vision: Democratize software development by allowing non-programmers to create applications using an AI-powered, no-code platform.

Growth & Investments

• 2018: Raised $29.5M in Series A.
   

• 2023: Raised $250M in Series D, bringing total funding to over $500M.
   

• Investors included: Microsoft, SoftBank, Jungle Ventures, Qatar Investment Authority.
   

• Peak valuation: Estimated between $1.2B - $1.5B.

Key Milestones

• 2016: Company founded under the name Engineer.ai.
   

• 2018: Raised $29.5M in Series A funding.
   

• 2023: Raised $250M in Series D, reaching unicorn status with over $500M total funding.
   

• February 2025: Founder Sachin Dev Duggal steps down as CEO; Manpreet Ratia takes over leadership.
   

• May 2025: Files for bankruptcy in the UK, US, India, UAE, and Singapore after severe financial and legal issues are revealed.

The Collapse

Financial Misrepresentation

• Builder.ai claimed $220M in 2024 revenue, but independent audits revealed it was only $55M - a 300% inflation.
   

• 2023 revenue was also revised from $180M down to $45M.

Fake Transactions

• Investigations uncovered fabricated customer deals, especially via Middle Eastern intermediaries.

Liquidity Crisis

• In 2024, Builder.ai borrowed $50M from Viola Credit.
   

• In May 2025, Viola froze $37M from company accounts, leaving just $5M in liquidity.

Leadership Red Flags

• Founder Duggal and CRO Varghese Cherian both resigned ahead of disclosures.
   

• Duggal has previously been linked to financial irregularities related to India’s Videocon case, which he denied.

Legal & Regulatory Issues

• The US Attorney’s Office (Southern District of NY) requested full financial disclosures, customer lists, and internal policies.
   

• Builder.ai’s legal counsel asked employees to preserve all records.

Lessons Learned

1. Thorough Due Diligence Is Non-Negotiable

Even top-tier VCs and corporations can miss red flags. FOMO (fear of missing out) should never replace diligence.

2. AI Hype Can Be Misleading

Many so-called “AI” platforms are powered by manual labor. Validate tech claims, especially when companies promise magical automation.

3. Financial Transparency Matters

Founder-linked auditing firms and inflated reports can deceive investors and partners. Independent audits and controls are critical.

4. Strong Governance Prevents Collapse

Sound corporate governance and accountability structures could have helped detect the issues earlier.

Final Thought

Builder.ai’s story is a cautionary tale. Despite billion-dollar backing and global media coverage, the foundation was weak. As investors and builders, we must remember: no amount of marketing can replace real product value and integrity.