Builder.ai billed itself as a no-code artificial intelligence platform, and in the end, the company seems to have taken the no-code part too seriously.

Once an AI unicorn, today, the Microsoft-backed startup (formerly known as Engineer.ai) has crashed and is going through insolvency proceedings in the US amid allegations of faking its AI tech and more.

Builder.ai is also being accused of inflating its revenue in order to lure investors, plus there have been allegations that the company simply used human workers to fill in for AI in its no-code platform.

In particular, Builder’s business relationship with DailyHunt owner VerSe Innovations has come under scrutiny, following months of issues at a corporate governance level and the exit of the CEO and cofounder.

In February this year, the company’s board removed cofounder Sachin Dev Duggal from the position of chief executive officer due to the alleged financial irregularities. Its investor, Jungle Ventures’ managing director, Manpreet Ratia, was immediately appointed as the new CEO; he couldn’t buy much time for Builder.ai either.

With Builder.ai now facing potential dissolution, this marks the first significant crisis within India’s AI ecosystem, dealing a substantial reputational blow to other companies building from India.

On social media, the Builder.ai story has drawn comparisons to India’s back-office legacy, amid allegations that human employees ran the so-called AI platform. It’s also being seen as a lesson on why believing in the AI hype — without a solid product — can leave companies on weak footing.

Today, Builder.ai is said to be unable to recover from “historic challenges and past decisions that placed significant strain on its financial position”, as the company’s statements after the insolvency filings indicated.

Headquartered in the UK, Builder.ai also said it would be “entering into insolvency proceedings” and has appointed an administrator to “manage the company’s affairs”, indicating that the management — with new CEO Manpreet Ratia — will soon step aside.

Ratia did not respond to Inc42 regarding Builder.ai’s insolvency proceedings, revenue inflation and other allegations.

But based on conversations with former employees and sources close to Builder.ai, Inc42 is now able to piece together exactly what went wrong at the startup and why many consider this a critical point in the AI story emerging from India.

How Builder.ai Squandered Millions

Founded in 2016 by Duggal and Saurabh Dhoot in Gurugram, Builder.ai allowed developers to build apps and websites with little to no coding knowledge using AI. It worked with a vision to ease customised software development for entrepreneurs, as easy as ordering a pizza.

Starting operations in 2018, Builder.ai introduced an AI-based virtual assistant, Natasha, which claimed to assist users with every step of software development. It was marketed as the world’s first AI product manager that helped users go from ideation to design, project management, and even code generation.

It’s on this promise that the company raised $29.5 Mn in its Series A funding round in 2018, led by Lakestar and Jungle Ventures, with participation from SoftBank’s AI-focused incubator DEEPCORE.

This was the first of many rounds. Builder.ai’s journey is pockmarked with large funding rounds as seen above.

This is why Builder.ai is not just any........

© Inc42