• Builder.ai's parent, Engineer.ai Corporation, has entered insolvency proceedings after failing to recover from financial challenges.
  • Viola Credit seized $37 million from Builder.ai's accounts, leaving only $5 million, much of which is inaccessible due to restrictions.

London-based enterprise tech startup Builder.ai, backed by Microsoft and Qatar Investment Authority, has initiated insolvency proceedings through its parent company, Engineer.ai Corporation.

The firm has appointed an administrator to manage the company’s affairs after failed attempts to reverse its financial downturn.

A company spokesperson confirmed the move, stating,

“Despite the tireless efforts of our current team and exploring every possible option, the business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position.”

Debt Seizures and Frozen Funds

According to a report, the collapse was hastened when Viola Credit, which had extended a $50 million debt facility last year, seized $37 million from Builder.ai’s accounts.

This left the company with only $5 million in accessible funds. CEO Manpreet Ratia, who took charge in March, said the remaining funds are trapped in Indian bank accounts due to regulatory restrictions and cannot be used to pay employees.

Ratia revealed that when he assumed leadership, Builder.ai had just $7 million in cash reserves.

Despite raising $75 million from existing shareholders in an attempt to stabilise the business, mounting dues of $85 million to Amazon and $30 million to Microsoft forced the company to file for bankruptcy.

He also disclosed that company funds in a Singaporean bank account intended for salaries were seized by creditors.

The financial crisis has resulted in significant layoffs, and the company has said it will now work closely with administrators to explore options for salvaging parts of the business.

Founded in 2016 by Sachin Dev Duggal and Saurabh Dhoot in Gurugram, Builder.ai aimed to simplify app and website development through AI-driven tools and raised over $450 million from major investors, including Microsoft, Iconiq Capital, and Jungle Ventures.

Edited by Annette George