Sources: 
Builder.ai, a London-based AI startup founded in 2016 by Sachin Dev Duggal, has filed for bankruptcy after an independent audit revealed its 2024 revenue was vastly overstated.
The company claimed $220 million in revenue, but actual income was closer to $50 million, leading lender Viola Credit to seize $37 million from its accounts.
The startup, which marketed itself as an AI-powered no-code platform simplifying app development, actually relied on around 700 human engineers in India to manually write code, contradicting its AI-generated claims.
Further investigations uncovered allegations of "round-tripping" with Indian social media firm VerSe Innovation, which runs Dailyhunt and Josh platforms. Between 2021 and 2024, both companies reportedly billed each other similar amounts for products and services that were often not delivered, inflating Builder.ai's sales figures to attract investment.
"The company had massively inflated its 2024 revenue — claiming $220 million when actual income was closer to $50 million," the audit found.
Builder.ai was backed by major investors including Microsoft, the Qatar Investment Authority, SoftBank’s DeepCore, and IFC. However, the financial discrepancies and alleged fraudulent practices have led to bankruptcy proceedings in India, the UK, and the US.
This case highlights risks in the AI startup ecosystem where marketing claims may not align with operational realities, raising concerns about transparency and investor due diligence.
Sources: 1
Builder.ai, an AI startup claiming $220 million in 2024 revenue, has filed for bankruptcy amid revelations of inflated sales and a probe into alleged round-tripping with Indian firm VerSe Innovation. An audit revealed actual income near $50 million, leading to lender Viola Credit seizing $37 million.
