In a stunning twist, Builder.ai—once hailed as one of the UK’s rising tech unicorns—has filed for insolvency, leaving more than 1,000 employees suddenly jobless. Its dramatic downfall serves as a powerful reminder that even with AI hype and backing from global giants like Microsoft, a startup can’t survive without a solid product, strong leadership, and satisfied users.
Launched in 2016, Builder.ai aimed to revolutionize software development by making app creation accessible to everyone. The platform pitched itself as a low-code or no-code solution, allowing users to build applications with minimal technical know-how. Momentum grew fast, especially after Microsoft invested in 2023, helping push total funding to $450 million and securing unicorn status. Other major investors included the Qatar Investment Authority, Iconiq Capital, and Jungle Ventures.
But it turns out the tech didn’t live up to the talk.
Builder.ai promised AI-powered software development, but the reality was more of a hybrid model. Users would interact with ‘Natasha,’ the company’s AI agent, to generate a project outline. From there, humans—rather than fully autonomous systems—stepped in to code the actual product. The company’s website likened the process to assembling a LEGO set. Yet many customers discovered that app components don’t snap together so neatly. Instead, they ran into integration issues, bugs, and a need for more technical knowledge than expected.
This gap between promise and reality quickly caught up with Builder.ai. Customers complained that the platform required far more hands-on work than advertised. What was billed as “no-code” often demanded professional-grade troubleshooting skills. Worse still, complaints mounted about missed deadlines, buggy software, and refund disputes. On review sites like Trustpilot, the disconnect was clear. While a few glowing testimonials stood out, nearly a quarter of reviews were one-star, with many users reporting stalled projects and months-long delays.
Leadership struggles made things worse. Founder Sachin Dev Duggal was a high-profile figure, often praised as a visionary entrepreneur. But behind the scenes, concerns were brewing. In 2024, Duggal became a suspect in a money laundering investigation in India. Then, in early 2025, whistleblowers accused Builder.ai of inflating sales numbers. The company slashed revenue projections by 25% and brought in Big Four auditors to investigate. Duggal was replaced as CEO, though he retained the curious title of “Chief Wizard” and remained on the board.
These leadership moves raised more red flags. Notably, the company’s previous auditor—initially believed to be independent—was revealed to have past ties to Duggal, having served as a director at one of his earlier ventures. Builder.ai also cycled through multiple small auditing firms for its international branches, a detail that typically sends warning signals to seasoned investors.
Internally, morale was crumbling. On Glassdoor, employees painted a bleak picture of a chaotic workplace. Reviews spoke of “AI-powered chaos,” misaligned leadership, and a toxic culture. Some even joked that the company deserved a Netflix documentary, not just news headlines. One former staffer shared that they were laughed at in job interviews simply for having worked there. The only consistent praise? Salaries were paid on time—until the sudden collapse put even that in doubt.
So how did such a well-funded company, backed by global names and riding the AI wave, fall apart so quickly?
At the heart of it, Builder.ai’s tech didn’t deliver on its bold claims. AI was used more as a marketing badge than a true engine of innovation. And when real problems emerged—customer complaints, poor reviews, internal whistleblowing—leadership failed to act decisively or transparently. Investors, lured by the AI gold rush, seemingly overlooked warning signs in both public and private data.
For the broader tech ecosystem, Builder.ai’s fall is a cautionary tale. Investors chasing the next big thing in AI must look beyond buzzwords and demo videos. True innovation still requires robust execution, ethical leadership, and genuine value for users.
The AI label alone won’t save a company. And no matter how shiny the pitch deck, there’s no shortcut around building trust, delivering quality, and treating people right.
