Why Did Microsoft-Backed Builder.ai Collapse? Details Inside

The company, which had positioned itself as a pioneer in AI-driven no-code app development, will now begin formal bankruptcy proceedings in the U.K., U.S., UAE, Singapore, and India

Founded in 2016, Builder.ai raised over $450 million from heavyweight investors

Source : ABP Live AI

Builder.ai, the British no-code AI startup once hailed for its high-profile partnership with Microsoft and a $250 million funding round led by the Qatar Investment Authority, has filed for bankruptcy protection, marking a dramatic collapse for the once-promising tech company.

According to Bloomberg, the crisis unfolded after major lender Viola Credit seized $37 million from the company’s accounts, leaving it with just $5 million in restricted funds—an amount insufficient to sustain operations across its five-country footprint.

The company, which had positioned itself as a pioneer in AI-driven no-code app development, will now begin formal bankruptcy proceedings in the U.K., U.S., UAE, Singapore, and India.

Indian Engineers Behind AI

The company was born out of co-founder Sachin Dev Duggal’s frustration with the inefficiencies of traditional software development. His vision was to simplify the process by combining reusable code modules with human developers, all orchestrated by an AI layer. This approach was packaged into a platform called “Builder Studio,” which featured a digital assistant named “Natasha” and promised a smooth, AI-enhanced user experience.

But behind the sleek pitch, the reality was less automated. Much of the development work was being carried out by human engineers in India, not by AI. In 2019, The Wall Street Journal exposed the gap between the marketing and the mechanics, revealing that Builder.ai’s touted artificial intelligence was largely a branding tool rather than a technological breakthrough. As the article bluntly put it: “all engineer, no AI.” This disconnect between promise and practice would come to define Builder.ai’s journey.

Leadership Shakeup And Mass Layoffs

In a move aimed at salvaging investor trust, CEO Manpreet Ratia took the reins from founder Sachin Dev Duggal earlier this year. However, the leadership change proved too late. Ratia confirmed that most employees have now been laid off, and operations have ground to a halt.

Backed By Tech Titans And Global Investors

Founded in 2016, Builder.ai raised over $450 million from heavyweight investors including Microsoft, WndrCo, the IFC (World Bank Group), Lakestar, and SoftBank’s DeepCore incubator. A highlight came in May 2023, when Microsoft not only made an equity investment but also announced plans to integrate Builder.ai’s platform with its Azure and AI services.

At its peak, Builder.ai was touted as a revolutionary tool allowing businesses to rapidly create custom apps with minimal coding, riding the wave of growing interest in generative AI and no-code platforms.