Builder.ai, the artificial intelligence startup backed by Microsoft Corp. and the Qatar Investment Authority, is entering insolvency proceedings just weeks after revising its revenue figures and acknowledging “problems” under previous leadership.
This follows the seizure of most of its cash from a major creditor, Builder.ai’s Chief Executive Officer Manpreet Ratia said in an interview Tuesday. The company noted it will appoint an administrator to manage its affairs.
Based in London, the company become a major player in the rapidly expanding artificial intelligence industry, providing no-code and low-code software development platforms. Since its founding, Builder.ai has raised over $450 million from investors who believe it can lead AI-enabled software development.
Viola Credit, which provided $50 million in debt to the software firm last year, has seized $37 million from Builder.ai’s accounts, leaving the company with $5 million, Ratia said in a recent interview Tuesday, without giving a clear reason for the seizure. Viola didn’t immediately respond to a request for comment left after business hours.
Builder.ai slashes sales figures, overhauls leadership to regain investor trust
Ratia said that the company, which operates in five jurisdictions — the UK, the US, India, the United Arab Emirates, and Singapore — will file for bankruptcy in due course, following each region’s process.
With the startup short on cash, Ratia said he’d decided to let go of most of Builder.ai’s employees. The company’s remaining $5 million is located in Indian accounts and couldn’t be used to pay workers due to restrictions on moving money out of the country, he said.
Concerns over the financial health of Builder.ai started emerging mid-way through 2023 when the company had reset its reported sales.
In March 2025, Bloomberg News announced that Builder.ai had sharply reduced the sales data it had reported to investors and hired outside auditors to recheck its books for the last two years. These internal adjustments caused the company to lower its revenue expectations for the second half of 2024 by about 25%.
The red flags in the finance sector were at a time of critical leadership change. Founder Sachin Dev Duggal stepped down as chief executive officer in February, with Manpreet Ratia taking over.
Builder.ai also reformed its board of directors simultaneously, reducing the board from nine to five seats and requesting Duggal to step down from four of the five board seats he previously occupied. These moves constituted a move by the company to regain credibility and shore up governance.
A Cautionary Tale in the AI Investment Boom
Founded in 2016, Builder.ai provides a platform enabling businesses to build custom smartphone apps with little to no coding, delivering faster turnaround times than traditional software outsourcing.
The company’s downfall highlights the hazards that investors are running in the fast-growing field of AI, where some investors have flocked to the lofty valuations and large funding rounds for the next OpenAI or Anthropic. The firm was a key beneficiary of that investment wave, raising a $250 million round in 2023 at the height of post-ChatGPT mania and booming demand for AI tools.
However, as Builder.ai said, it has been unable to overcome historic challenges, and recent initiatives to save the business have not been successful. It’s a cautionary tale about how unbounded optimism, governance lapses, and aggressive scaling can derail even the most promising startups in high-growth industries.
Insolvency proceedings in the UK—where Builder.ai is headquartered—differ significantly from bankruptcies in the United States. In the UK, a court-approved administrator typically takes control of the company and works directly with creditors, sidelining existing management.
By contrast, US bankruptcy law allows current managers to remain in charge, though major decisions such as asset sales or new borrowing must receive approval from a federal judge. Both systems generally require creditors to approve any reorganization plan through a vote.
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