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Microsoft-backed UK tech unicorn Builder.ai collapses into insolvency
- louthy 1y agohttps://archive.ph/T5ean https://archive.ph/T5ean
- zpeti 1y agoAbsolutely baffles me how you can blow $500m on a website builder without anyone noticing. What the hell happened? Unless it was an actual defrauding of investors, but how were the investors so stupid?
- mattlondon 1y agoPerhaps they blew it all on "research" and GPU costs? The current Gemini canvas implementation is pretty wild and can create you an app or website very very easily. Not as easy as ordering a pizza sure, but still even with just a few iterations you have something truly decent. Occasionally you luck out and the "one shot" is precisely what you want, but that typically requires an extensive prompt so you're beyond pizza range then. Perhaps they were just too ahead of their time in that regard... But then if they'd waited then Google and OpenAi and Anthropic would have just eaten their lunch anyway (provided Claude was not too busy blackmailing you anyway!)
- thw09j9m 1y agonah https://www.theverge.com/2019/8/14/20805676/engineer-ai-artificial-intelligence-startup-app-development-outsourcing-humans https://www.theverge.com/2019/8/14/20805676/engineer-ai-arti... (same company, before rebranding to builder.ai)
- mattlondon 1y agoI mean it's kinda amazing, this was just in 2019 that this company was basically lying about being able to do this to get investment, yet now I can actually do it myself, right now, for free*. Incredible - where will we be in another 5 years?!!! * - with AIStudio at least...
- deleted 1y ago[deleted]
- lm28469 1y agoSome people have so much money they don't mind investing 10-100m here and there in the hope of making a 10x return. Greed and hype explains a lot of the juicero type of investments. It says a lot when public services are deteriorating pretty much everywhere while investors blow hundred millions on fruit pressing machines and LLM wrappers
- bojan 1y agoThe public services are deteriorating because that's what the people are voting for.
- lm28469 1y agoCould that be because 99% of mass medias who make or break politicians are owned by a small elite of hardcore capitalists who have their own interests in mind? Democracy isn't just about showing up every few years and putting a name in a ballot, it's a framework that requires a whole bunch of other things. A lot of EU countries and the US are getting closer and closer to oligarchies
- AJRF 1y agoWhat do you mean by this? Do you mean in the UK, where this company was based. How are UK citizens voting for deteriorating services?
- justinclift 1y agoDid you miss the Brexit thing?
- deleted 1y ago[deleted]
- ath3nd 1y ago> How are UK citizens voting for deteriorating services? - Voting Tory, you get cutting of public health services (e.g NHS) and and Brexit. - Voting Reform, you get the same plus a healthy dose of xenophobia and nationalism (it's thinly veiled-fascism, really). - Voting Labour, you get the same cuts but with a nice label of "progress", so you can feel good about yourself. All the while flat prices are skyrocketing and your doctor's appointment might not ever happen, but there is always money for militarizing police and for sending abroad some bombs to kill Palestinians. If people did want improved public services, they should have voted for somebody like Jeremy Corbyn, who had the decency to distance himself from the absolute disgrace that Labour has become, or at least for the Greens/Socialists. But people did not, in fact, want improved public services, not really. They preferred to either vote for the xenophobe thugs of Reform, the xenophobe elitist Tories, or the pretend-liberal oligarch/capital-loving "Labour", none of who have any incentives to improve public services. You get what you vote for.
- benbojangles 1y agoIf you look at some youtube videos of Sachin Duggal over the last year he is draped in lvmh labels, the finest tailoring, super expensive turkey teeth, and doing news interviews from expensive Dubai suites. My guess is he will make those things his mainstay from now on. I notice a common theme in dodgy ceo's; they all do the carrying-an-invisible-ball thing with their hands when they are presenting.
- rsynnott 1y agoI mean, have you not been paying attention to the current AI bubble? Hundreds of billions are being blown on all manner of implausible nonsense.
- matusp 1y agoWe will see more and more AI startups running out of money soon. I know of a handful of similar 100m+ raised companies that have no product to speak of and are just cruising towards their end.
- 6stringmerc 1y agoWhen the dominoes start to fall, perhaps it’d be helpful to post a public list of existing / existed AI firms with brief descriptions, timespan of operation, capital / investments publicly known, and give a reference point for historical sake. The startup sector being quite diverse, one specifically for AI could be interesting…as in context for all the “problems” and “benefits” AI was going to solve but failed and burned money in the process.
- airstrike 1y agoMight as well start building that list here
- InsideOutSanta 1y agoSomebody needs to bring back Fucked Company for AI companies.
- jsheard 1y agoCan we bring back Webshit Weekly while we're at it? RIP n-gate, you would have loved talking shit about AI companies.
- formerly_proven 1y agoThat blog aged very well > TikTok (business model: "Uber for Vine") is more popular than Facebook (business model: "Uber for Sino-Soviet Propaganda"), presumably because it bypasses the middleman and delivers the content straight from the source. Hackernews debates whether it's just a matter of time before it turns out to be evil, or whether a social-media application targeted at children and operated by a government full of genocidal monsters is and shall remain "fun." Other Hackernews point out that the app, which is operated by a company in which the murderous, barbaric Chinese government has an ownership stake, is mean to fat people. > Github (business model: "Uber for README.MD") directs its employees to eat its own dog food. Because of Github's acquisition by Microsoft (business model: "Uber for customer abuse"), it turns out that what Github engineers are eating came out of the dog to begin with. Hackernews tries to figure out whether they, as customers of Microsoft's latest desperate attempt to get anyone to use Azure, have any control over their information, or whether they'd be better off remaining with their existing workstation-as-a-service provider, Apple (business model: "Uber for garden walls").
- spamizbad 1y agoEven a financially responsible (and I’m not suggesting Builder.ai is one of these) company in the AI space is going to be significantly more capital intensive than your typical SaaS startup, and I suspect are fundamentally more challenging to operate.
- mtkd 1y agoSaaS companies tended to need material engineering resource due to the software stacks and squad-style team structures in place -- also leaned heavily on costly metered infra I'm not seeing anything like the same level of heads or stack complexity in this wave (Vercel, Firebase etc.), and the vendors involved get cheaper every day ... along with increasing ability to run models locally with no metered costs at all
- aerhardt 1y agoHow? Now you need to deal with all the traditional infra, plus a bunch of specific infra dealing with LLM apps, even if you’re just a wrapper using vendor APIs. How are things in any way simplified? I only see more layers of complexity.
- spamizbad 1y agoIf you're in the AI space you need roughly the same infrastructure as any other SaaS PLUS your LLM costs. Take a look at AWS Bedrock costs [1] and you'll soon realize your costs can escalate rapidly unlike traditional SaaS infra which is easier (er, less difficult) to predict costs. [1] https://aws.amazon.com/bedrock/pricing/ https://aws.amazon.com/bedrock/pricing/
- maccard 1y agoThe dirty secret of an awful lot of these LLM SAAS companies is that AWS are giving them tens of thousands of dollars to bootstrap, which they are paid back for with 8 figure investments from VCs. Anyone who is putting their own money on the line for anything other than the very first $100 or so for a PoC is being conned.
- krona 1y agoFrom earlier this year: > A partner at accounting firm PKF Littlejohn signed off the UK accounts of the artificial intelligence start-up, despite having previously served as a director of another company also set up by Builder.ai’s founder, Sachin Dev Duggal, according to a review of hundreds of filings analysed by the Financial Times. https://archive.ph/qdUFD https://archive.ph/qdUFD
- ixaxaar 1y agoI wonder how many of these hype-chasing AI founders are going to take the path of self-enrichment while capitulating their startups when they get exhausted of searching for a moat.
- kasey_junk 1y agoAll of them
- nialse 1y agoThat is indeed the song of venture capital.
- 7952 1y agoAnd there are already so many companies with an existing moat that could go into this space with their existing user base.
- diggan 1y ago> of these hype-chasing AI founders [...] I mean, if you qualify that question like that, then probably closer to 100%. What would be more interesting to know, is how many AI founders starts out as "not hype-chasing", but end up self-enriching/capitulate their startups regardless, basically turning into it rather than starting out like that.
- deleted 1y ago[deleted]
- moron4hire 1y ago
- rvz 1y agoThe entire company and its $500M has been "deleted" [0] over fraud and cooking their books. A great candidate for the Theranos of AI, even with Microsoft involved as an investor. We'll see a new wave of fraud(stars) being exposed out of this AI hype. [0] https://builder.ai https://builder.ai
- Tarsul 1y agohere's the website from the waybackmachine: https://web.archive.org/web/20250328114320/https://www.builder.ai/ https://web.archive.org/web/20250328114320/https://www.build... look at all the awards and brands!
- 6stringmerc 1y ago“Assembles your idea like a LEGO set” is pretty blatant trademark infringement too. Clearly it did not work as a LEGO set because those…actually work. Yet another example of startups getting funding whilst blatantly flouting IP ethics, color me not surprised at all.
- briandear 1y agoNot really a trademark infringement.
- BandButcher 1y agoMaybe I'm just a bad dev but I'm baffled how they charge $46k for "29 features" and $56k for "43 features"... Straight up guestimations and magic numbers but then again they also highlight how you don't have to know anything about tech to use them, so I'm sure setting "fixed pricing" for a fixed number of "features" is a great way to snake oil salesman potential customers
- fakedang 1y agoBest parts are the Gartner Magic Quadrant and G2 awards. Perhaps we should treat them as the Forbes 30 under 30 of SaaS.
- datavirtue 1y agoHmmm...criminal CEO plus no product that people need. Who would have guessed this outcome?
- 6stringmerc 1y agoUntil clawbacks as strict banishment enforcement from the ability to serve in corporate governance roles, it’s rather depressing to catch up after the fact and realize there’s nothing particularly stopping these bad actors individuals from profiting and potentially moving on to another shaky, at best, enterprise courting suckers…I mean, investors.
- tuyguntn 1y agoWhy is this a big news, didn't we already learn that most startups/companies fail and investors are just betting to find their next unicorn? contrary to builder.ai, we now have success stories in this area: lovable, cursor, replit agents and so on
- jsheard 1y ago> contrary to builder.ai, we now have success stories in this area: lovable, cursor, replit agents and so on Builder.ai was also a "success" until someone double checked their books and discovered they were inflating their revenue by about 300%. Much to consider.
- chairmansteve 1y agoIt's maybe a bit of a Theranos situation. Not your normal sincere effort that fails.
- bigtex 1y agoAre any of those companies profitable?
- deleted 1y ago[deleted]
- conradfr 1y ago> The company’s founder Sachin Dev Duggal (...) retained his board position and title of “chief wizard”. Flash of the Silicon Valley show.
- gchamonlive 1y agoLook at all the great unsustainable AI applications we're never going to be able to use. I think the big and juicy AI applications are just so that GPUs can go brrrr[1]. Just gimmicks. Real and useful applications will come from SLM that can be run on SoC like phones or Raspberry PIs and LLMs optimized to run on consumer grade hardware like the 3060s, not with those models that require multimillion dollar setups to be able to run. [1] https://news.ycombinator.com/item?id=40337936 https://news.ycombinator.com/item?id=40337936
- 38 1y ago[flagged]
- dxdm 1y agoI, as a human, enjoyed the flavor of this phrase, and I applaud this stylistic choice.
- deleted 1y ago[deleted]
- deathsentience 1y agoYou mean talk like an ai?
- nikcub 1y agoFollowing the public reporting timeline of builder.ai lays out a fascinating story akin to Theranos or Wework. I'm sure we'll get an exhaustive account of exactly what happen in due course, and there will likely be other such cases that come out of the most recent AI investing boom. Aug 2019 - WSJ report that for builder.ai the "AI" means "Actually people in India" https://www.wsj.com/articles/ai-startup-boom-raises-questions-of-exaggerated-tech-savvy-11565775004 https://www.wsj.com/articles/ai-startup-boom-raises-question... FT pick up the trail over a year ago with a series of reports: Mar 2024 - Men behind builder.ai named in criminal probe https://www.ft.com/content/7ff3c5fc-e390-4ca8-9c7d-11fd56ab7f6f https://www.ft.com/content/7ff3c5fc-e390-4ca8-9c7d-11fd56ab7... Mar 2024 - The wild ride of a Microsoft-backed tech unicorn This is a full detailed profile of the CEO and the company detailing their wild spending and fundraising details: https://www.ft.com/content/11afc46c-b435-489d-a9f1-134ad0c00d25 https://www.ft.com/content/11afc46c-b435-489d-a9f1-134ad0c00... It all falls apart after that report: May 2024 - CEO steps down https://www.ft.com/content/f8882c90-ef69-4a62-aecf-9d3725aca6b3 https://www.ft.com/content/f8882c90-ef69-4a62-aecf-9d3725aca... May 2024 - builder.ai finds auditor had links to previous CEO: https://www.ft.com/content/26c98590-e8f9-4cd9-83d6-db0d25ad215c https://www.ft.com/content/26c98590-e8f9-4cd9-83d6-db0d25ad2... Apr 2025 - builder.ai restates revenues and hires outside auditors to investigate inflated sales https://www.bloomberg.com/news/articles/2025-03-31/microsoft-qia-backed-startup-builder-ai-hires-auditors-to-probe-inflated-sales https://www.bloomberg.com/news/articles/2025-03-31/microsoft... and this week they folded. The website was up 48 hours ago last I checked, but has now been taken down.
- aaomidi 1y agoI’m not sure what happened there but I’ve both experienced and seen so many startups where their initial leadership was great, then VC gets involved and completely destroys the long term trajectory of the company in exchange for short term growth. I genuinely think twitter and LinkedIn has ruined the brains of founders who follow fads after losing the goals and visions they had when they first started.
- SpicyLemonZest 1y agoThere've always been companies that crash and burn chasing unrealistic dreams of future profits. I think what Twitter and LinkedIn have created is the false perception that these kinds of things are representative of the industry. Another recent unicorn startup in the UK is Tripledot Studios, which has much more revenue and has made bigger investment deals than Builder.ai at its peak. But they're in mobile gaming and not AI trendy wave of the future stuff, so you don't hear so much about them.
- xyst 1y agothe first domino has fallen, the rest of the industry to follow? Big tech then swoops in and buys up any _worthwhile_ startup for cheap and consolidation of power continues for tech.
- kwillets 1y agoThe UK has cemented its place in tech as the land without Sarbanes-Oxley.
- benbojangles 1y agoIt's true.
- benbojangles 1y agoRead about so many companies here in the UK that setup, claim huge success, max out loans and debts, then either fold/disappear or float on fraudulently inflated share prices, owner sells all their shares, then the company share price crashes. Happens all the time now, sadly, since the UK's welcome doors opened wide. This system runs deep here, laundering with barber shops, american candy stores, made up corporations, crypto fraud, carousel fraud, corporate fraud. It makes me sad, because I know I will never get a chance to build a business successfully and honestly here after all this damage is done.
- datavirtue 1y agoNow the M&M store makes sense.
- rorylawless 1y agoThe M&M store is the only legit business in London.
- tacker2000 1y agoWell that investor list reads like a who’s who of dumb money…
- sgt 1y agoThat TLD is no guarantee for success.
- nssnsjsjsjs 1y agoDo we need law to keep wages in escrow, including notice periods.
- bartread 1y ago> The company’s founder Sachin Dev Duggal stepped down as chief executive earlier this year but retained his board position and title of “chief wizard”. If only there were some signal in the behaviour of a person who calls themselves “chief wizard” that might suggest they were prone to making poor quality business decisions. For real: this is not a job title that would be adopted by a “serious person” - a real expert, with real insight, and a real plan to deliver. Why have investors given his company tens of millions of dollars? I get that investors are looking for that 10x return and are ready for some failures along the way but that mindset seems to be used as cover for a lot of dumb money. Whereas the reality is that VCs and corporate backers would enjoy much better returns if they simply avoided the most obvious grifters. People who can’t answer specific questions about delivery with concrete answers - Elizabeth Holmes, the WeWork clown, this guy, and on and on - should be avoided. And especially if they have dumb job titles.
- greatgib 1y agoBuilder.ai was then able to raise $75mn from some of its existing shareholders to try to fix its balance sheet, according to two people familiar with its finances. I'm just trying to imagine the kind of funds or investor for who 75m dollars is just a comma in a report and that can give them so easily despite the obvious high probability to lose it.
- justinbaker84 1y agoIt is dissapointing to see how frequently VCs invest hundreds of millions of dollars into fraudulent companies. This is very different from investing in legit companies that don't work. It often seems like you are more likely to raise VC by being a fraud than by being a responsible person who wants to do something positive in this world.
- blitzar 1y ago> It often seems like you are more likely to raise VC by being a fraud than by being a responsible person who wants to do something positive in this world. You can't 10x - 100x and get an exit on a responsible person who wants to do something positive in this world.
- chuckadams 1y agoThe ironic thing is, if Builder.ai were a younger company, they might have been a success through the unorthodox expedient of actually using AI for real. Maybe they were forward-looking -- we had "machine learning" then that was making some inroads -- but when you use foresight to make more plausible what is still a fraud today, it's ... well, still a fraud. Someone will build Theranos's mythical diagnostic robot someday too, doesn't mean it isn't fiction now.