Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Builder.ai, one of the UK’s best-funded technology start-ups, is entering insolvency proceedings, weeks after restating its revenues and admitting “problems” under its past leadership.
The London-based group, which is backed by Microsoft, informed employees about serious financial difficulties during a company-wide call on Tuesday.
The company confirmed to the Financial Times that its main unit, Engineer.ai Corporation, “will be entering into insolvency proceedings and will appoint an administrator to manage the company’s affairs”.
The insolvency is a blow to Builder.ai’s blue-chip backers such as Microsoft and Qatar’s sovereign wealth fund, which collectively poured $450mn into a company that claimed it could make the process of building an app or website “as easy as ordering pizza”.
The company’s founder Sachin Dev Duggal stepped down as chief executive earlier this year. Builder.ai said on Tuesday that it was “unable to recover from historic challenges and past decisions that placed significant strain on its financial position”.
Duggal came under scrutiny after the FT revealed last year that he had been named by authorities in India in relation to high-profile criminal probes, while he also fought a series of other legal disputes during his career.
Duggal has denied wrongdoing in relation to the Indian case and his lawyers have previously maintained that he is just a witness in the case.
In April, Builder.ai’s new chief executive Manpreet Ratia said the company had lowered the revenues it previously recorded for 2023 to $140mn and that it had previously lowered its forecasted revenue for the second half of 2024 by 25 per cent.
Earlier this year, the FT reported that Builder.ai had drawn scrutiny for accounting practices that included relying on an auditor with long-standing links to Duggal.
Read the full article here
