A British AI startup, Builder.ai, which raised $250M in a Series D funding round just 24 months ago, has collapsed into insolvency – reportedly with outstanding debts to Amazon and Microsoft alone of over $100 million.

The former “unicorn”, which sold an AI-augmented low-code application building service, made the announcement on May 20. Its failure comes a month after it slashed 220 of its 770 staff in a last-ditch restructuring.

Builder.ai said this week that it would be appointing an administrator to oversee insolvency proceedings after it had “been unable to recover from historic challenges and past decisions that placed significant strain on its financial position” despite “tireless efforts” from its management.

A crude calculation based on its Series D in May 2023, a reported $50 million debt line taken out in October 2024, and a $75 million injection in March 2025, suggests the startup was burning $500,000+ daily. 

Its last annual accounts, filed in August 2024 for the year-ending March 2023, showed revenues would have covered less than 9% of that. (It reported £23 million in annual revenues that year and claimed revenues of £140 million the next year. The latter claim could not be confirmed.)

It appointed a new CEO Manpreet Ratia, in February. Sources that attended an insolvency call hosted by Ratia told press he had revealed Builder.ai had cash reserves of just $7 million when he joined in March and raised $75 million more from shareholders to try and keep running.

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But with debts racking up, Ratia reportedly said, as reported by the FT, that he had been left trying to keep Builder.ai going with no money in recent days, before creditors seized remaining funds from a Singaporean bank account as he attempted to pay his US and UK employees.

The FT said Ratia told staff that the firm owed $85 million to Amazon and $30 million to Microsoft.

Once described as “one of the UK’s best funded” tech start-ups, the AI-powered app builder gained a significant profile with the help of founder and self-proclaimed “Chief Wizard” Sachin Dev Duggal, and had raised around $500 million in total from backers including Microsoft, Qatari wealth fund QIA, and Insight Partners, since its launch in 2016.

It had pitched its app building platform to those looking for a speedy no-code builder with “the technical sophistication a dev shop can deliver”, describing this as a “human assisted, AI powered assembly line” and boasted it was a partner to global brands including the BBC, NBC, and Fujitsu. Microsoft also took an undisclosed equity stake in 2023.

The company had boasted that a partnership with Microsoft in 2023 included “integrations across Azure OpenAI Service and other Azure Cognitive Services with Builder.ai’s software assembly line…” 

It even landed a spot in the “visionaries” corner of a 2021 Magic Quadrant for “Multiexperience Development Platforms.”

High-flying company in 2021...

A troubled year

However, legal issues had swirled around Duggal in recent years. The FT reported that he was involved in a criminal probe into money laundering in India, though builder.ai’s general counsel responded that he was just a witness in the case, in a now deleted blog available on the Wayback Machine. 

Duggal stepped down as CEO in March, though remained on the board and retained his wizard title, and was replaced by Amazon and Flipkart alumnus Ratia; managing partner at Builder.ai backer Jungle Ventures.

While Duggal had continued to promote Builder.ai online as recently as last week, he has yet to comment on the insolvency announcement.

The company was notably criticised in the WSJ in 2019 for using human engineers rather than AI for most of its coding work. The unpaid bill that Microsoft and Amazon have been left holding suggests it may have made some headway in actually using AI.

As Fireworks.ai’s CEO told us earlier this year, many companies spinning consumer-facing applications with an AI wrapper find that “cost is challenging because as those applications can quickly scale [but] they [founders] don't want to quickly scale into bankruptcy, and that's literally the conversation people are really worried about.”



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