Microsoft-backed Builder.ai accused of using Indian coders disguised as ‘AI’
Microsoft’s investment in Builder.ai once signaled strong confidence in what was marketed as a revolutionary AI-powered platform. The tech giant had backed the startup in 2023, adding major credibility to its promise of making software development as easy.Builder.ai once pitched a revolutionary idea: making software development as easy as ordering pizza, as per their website. The concept sparked excitement, and soon the company claimed it had created an AI-powered platform that could build apps and software effortlessly.The company was born out of co-founder Sachin Dev Duggal’s frustration with the inefficiencies of traditional software development.However, it was later alleged that much of the software development was actually being handled by developers in India, rather than the promised cutting-edge AI technology. While the company marketed its solution as a breakthrough innovation, it was allegedly powered by human coders behind the scenes, as per reports.Builder.ai entered the market with a bang and raised millions in funding. In June 2023, the company announced it had raised over $250 million in its Series D funding round led by Qatar Investment Authority (QIA). They had also raised a $100 million Series C investment led by Insight Partners, a global venture capital and private equity firm based in New York in March 2023.The company also gained recognition during the pandemic with Studio Store’s pre-packaged apps designed to help small businesses get online. Builder.ai went on to win accolades such as the ‘Hottest AI Startup’ at The Europas and was celebrated at CogX.In 2023, Microsoft joined as an investor, lending further credibility to Builder.ai’s vision and fueling expectations.However, according to reports, internal problems began to surface. The company allegedly relied on revenue projections and misleading AI claims to secure funding. In a major blow, Viola Credit, one of Builder.ai’s senior lenders, reportedly seized $37 million from the company’s accounts, triggering a loan default. CEO Manpreet Ratia, who had taken over just two months prior in an attempt to stabilise the company, was reportedly left with only $5 million in cash. Soon after, he reportedly filed for insolvency.Reports suggest that the company had overstated its financial performance, prompting investors including Microsoft to pull out of the struggling venture.The sudden collapse has left many customers, particularly startups and small businesses, scrambling to rebuild or migrate their applications.
Microsoft’s investment in Builder.ai once signaled strong confidence in what was marketed as a revolutionary AI-powered platform. The tech giant had backed the startup in 2023, adding major credibility to its promise of making software development as easy.
Builder.ai once pitched a revolutionary idea: making software development as easy as ordering pizza, as per their website. The concept sparked excitement, and soon the company claimed it had created an AI-powered platform that could build apps and software effortlessly.
The company was born out of co-founder Sachin Dev Duggal’s frustration with the inefficiencies of traditional software development.
However, it was later alleged that much of the software development was actually being handled by developers in India, rather than the promised cutting-edge AI technology. While the company marketed its solution as a breakthrough innovation, it was allegedly powered by human coders behind the scenes, as per reports.
Builder.ai entered the market with a bang and raised millions in funding. In June 2023, the company announced it had raised over $250 million in its Series D funding round led by Qatar Investment Authority (QIA).
They had also raised a $100 million Series C investment led by Insight Partners, a global venture capital and private equity firm based in New York in March 2023.
The company also gained recognition during the pandemic with Studio Store’s pre-packaged apps designed to help small businesses get online. Builder.ai went on to win accolades such as the ‘Hottest AI Startup’ at The Europas and was celebrated at CogX.
In 2023, Microsoft joined as an investor, lending further credibility to Builder.ai’s vision and fueling expectations.
However, according to reports, internal problems began to surface. The company allegedly relied on revenue projections and misleading AI claims to secure funding.
In a major blow, Viola Credit, one of Builder.ai’s senior lenders, reportedly seized $37 million from the company’s accounts, triggering a loan default. CEO Manpreet Ratia, who had taken over just two months prior in an attempt to stabilise the company, was reportedly left with only $5 million in cash. Soon after, he reportedly filed for insolvency.
Reports suggest that the company had overstated its financial performance, prompting investors including Microsoft to pull out of the struggling venture.
The sudden collapse has left many customers, particularly startups and small businesses, scrambling to rebuild or migrate their applications.
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