Building an AI Company

On 20 May 2025 Manpreet Ratia, the chief executive of Builder.ai, told the company's staff that it could not meet its obligations and would enter insolvency (reported). He had held the job for less than three months. The London company had been founded in 2016 by Sachin Dev Duggal as Engineer.ai, and it sold custom app development to businesses through an AI assistant called "Natasha", saying that its platform assembled most of each app from reusable components while human developers did the rest. It had raised ~$450 million or more (reported) from investors that included Insight Partners, SoftBank's DeepCore, Iconiq, the Qatar Investment Authority and Microsoft, and its last round, ~$250 million led by QIA in May 2023, had valued it at ~$1.5 billion (reported).

Duggal had stepped down as chief executive on 27 February 2025 (reported). A review of the accounts then found that 2024 revenue presented to investors as ~$220 million was nearer ~$55 million, and that 2023 had been overstated too (Bloomberg and FT, May 2025, reported). The revised figures breached the terms of a ~$50 million loan from lenders led by Viola Credit, which swept ~$37 million from the company's accounts (reported). Federal prosecutors in Manhattan had requested its records (Bloomberg, reported), and in June the US holding company filed for Chapter 7 liquidation in Delaware; about 1,000 people, ~80% of the staff, lost their jobs (reported). Duggal has denied wrongdoing, and no charges had been reported by late October 2026 (verify).

Three years earlier, on 1 August 2022, David Holz told The Register that Midjourney, the image-generation company he ran from San Francisco, was already profitable (reported). It had opened its beta three weeks before and charged subscriptions after a short free trial. It never raised outside capital. By Holz's account its 2023 revenue "significantly surpassed" ~$200 million, with a team reported at about 40 people (reported by The Information, verify). Neither figure was audited in public. But one company presented about the same headline revenue as the other after raising ~$450 million, and turned out to have a quarter of it.