How a $1.3B AI unicorn backed by Microsoft went bankrupt
Ever heard of a company that promised you could build an app as easily as ordering a pizza?
Well, that company — Builder.ai — just collapsed. And it wasn’t because of bad luck. It was because of big promises, hidden truths, and a lot of money that suddenly disappeared.
Let’s break it down.
The big idea that got everyone talking
Builder.ai said it used AI (artificial intelligence) to build apps for people without needing any coding skills. The star of the show was its AI system, “Natasha,” which was supposed to do all the smart work behind the scenes.
Sounds amazing, right? Investors thought so too.
Microsoft, along with other big players, invested over $500 million. The company was suddenly worth $1.3 billion and was being called the future of app building.
The plot twist: it wasn’t really AI
Here’s the kicker: most of the “AI-powered” work was actually done by real people — developers in India, not by the AI system it was bragging about.
In simple terms, the tech wasn’t as magical as it seemed. The company marketed itself as a cutting-edge AI solution but was really running on old-fashioned manual labor.
The money mess
Things got worse when their finances started coming under the spotlight:
- They claimed they made $180 million in 2023 — but actually made just $45 million.
- In 2024, they expected $220 million, but the real number? Only $55 million.
One of their lenders found out, pulled back $37 million, and the company ran out of cash fast. They couldn’t pay staff, couldn’t run the business, and had to shut everything down across their offices in the UK, US, India, and Singapore.
Faced legal issues too?
Yep. The founders — Sachin Dev Duggal and Saurabh Dhoot — are also caught up in legal trouble in India, related to money laundering and fraud (in other businesses). Not directly connected to Builder.ai, but it added fuel to the fire.
The takeaway
This whole situation is a reality check:
- Not everything labeled “AI” is truly AI.
- Fancy marketing doesn’t always mean real results.
- Honesty in tech matters — a lot.
Let this be your reminder to stay curious, ask questions, and always look beyond the hype.
"Watching Builder.ai go from a billion-dollar company to bankruptcy was surprising. It shows that behind every big promise, it’s worth looking a little closer. Was it really something new—or just a polished version of the old? This isn’t just about one company. It’s a reminder to stay alert, ask better questions, and not get carried away by the hype of marketing."