Jungle Ventures-, QIA-backed unicorn Builder.ai enters insolvency proceedings

Builder.ai, the London-based tech unicorn backed by Singapore venture capital investor Jungle Ventures and Qatar Investment Authority (QIA), has collapsed into insolvency, citing historic challenges and past decisions as key factors.

“Despite the tireless efforts of our current team and exploring every possible option, the business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position,” the company said in a LinkedIn post.

A Financial Times report said the tech unicorn informed employees it was filing for bankruptcy during a company-wide call on May 20.

The decision to enter insolvency proceedings comes about two years after Builder.ai announced raising $250 million in its Series D funding round led by QIA.

The Series D round included participation from existing and new investors, including Iconiq Capital, Jungle Ventures, and Insight Partners.

It also raised $100 million in its Series C round anchored by Insight Partners and backed by existing investor Jungle Ventures, International Finance Corporation, and Jeffrey Katzenberg’s WndrCo.

The company’s blue-chip backers, which include Microsoft and QIA, collectively poured more than $500 million into the company that claims to help companies go online with its AI-powered low-code app development platform.

The FT report said the company had secured a $50 million debt line in October but its cash reserves had dwindled to about $7 million when Manpreet Ratia stepped in and joined as CEO in March.

Ratia is also a managing partner at Jungle Ventures, one of Builder.ai’s early backers.

Builder.ai subsequently raised $75 million from some of its existing shareholders in an effort to stabilise its balance sheet, per the report, which cited people familiar with the company’s finances.

The company has come under scrutiny from corporate governance experts over its accounting practices, including the use of an auditor with long-standing ties to its founder, Sachin Dev Duggal.

Two overseas subsidiaries of Builder.ai had also rapidly switched between several small audit firms, including a Singapore-based accountancy firm that audited a now-infamous cryptocurrency hedge fund before its collapse, FT’s analysis found.

Duggal stepped down as chief executive earlier this year.

In April, the company lowered its revenue projections for the second half of 2024 by approximately 25% after certain sales channels failed to materialise.

In a social media post, Builder.ai said its immediate priority is to “support our employees, customers, and partners through this difficult time”.

“We will work closely with the appointed administrators to ensure an orderly process and to explore all available options for parts of the business, where possible,” Builder.ai said.