23-05-2025
Builder.ai, AI start-up with operations in Singapore, overestimated sales by 300%
The company, valued at about US$1.5 billion in its last fundraising round, is now planning to file for bankruptcy. PHOTO:
LONDON – When was seeking an emergency loan last year, the start-up gave lenders a revenue forecast that proved to be four times its actual sales, people familiar with the matter said.
A group of creditors, led by Israeli firm Viola Credit, were originally told that projected sales of US$220 million (S$284 million) for 2024, the people said. The company later disclosed that the actual revenue amount for the year turned out to be about US$50 million, they said.
That revelation was one of the factors that ultimately led the lenders to seize most of the UK-based AI start-up's cash, the people said. The company, which has operations in Singapore and was valued at US$1.5 billion in its last fundraising round, is now planning to file for bankruptcy. It marks the biggest collapse of an AI start-up since ChatGPT's 2022 release ushered in a surge of investment in the industry.
founder and former chief executive officer Sachin Dev Duggal hasn't responded to several requests for comment via phone and email. and Viola declined to comment. Representatives from the other members of the creditor consortium didn't respond to requests for comment.
The board was first alerted that something was amiss in December, when Mr Duggal came back asking for more funds after the loan, one of the people said. It conducted another round of due diligence and found that revenue was actually on track to be near US$100 million, the people said.
By February, the board pushed out Mr Duggal and had authorised a US$75 million injection into the company, one of the people said. It appointed Manpreet Ratia – an executive from its Singapore-based investor Jungle Ventures – as CEO and assigned an independent auditor to go through the books. That audit revealed that the final revenue figure for the year was about US$50 million, the people said.
At that point, the creditor consortium seized the cash in the company's bank accounts, about US$37 million.
whose platform lets businesses quickly create custom smartphone apps, was an early success story for European tech, raising funds from Microsoft and the Qatar Investment Authority. The World Bank Group's International Finance Corp., Hollywood mogul Jeffrey Katzenberg's WndrCo, Lakestar and SoftBank Group's Deepcore incubator have also invested in the company.
In a letter on May 20 to employees that was shared with Bloomberg, the company said it was 'unable to recover from historic challenges and past decisions that placed significant strain on its financial position.' said it will appoint an administrator to oversee the process. BLOOMBERG
Join ST's WhatsApp Channel and get the latest news and must-reads.
