Builder.ai, a London-based AI startup supported by Microsoft and the Qatar Investment Authority, declared bankruptcy after a major creditor seized $37M from its accounts. The company's financial struggles were exacerbated by severely overstated revenue projections—estimated at $220M while actual figures were around $55M. Following a leadership change, new CEO Manpreet Ratia attempted to stabilize finances through cost reductions. However, lenders' unexpected actions left the company unable to meet its payroll obligations, culminating in its insolvency process.
Since the leadership reset in March, we made real progress. Operating expenses were reduced from $40M to $21M per quarter. Margins improved more than 5x. Cash burn (excluding one-offs) was halved from $32M to $16M.
The company's financial difficulties were worsened by the discovery that it had considerably overstated its revenues. In 2024, Builder.ai projected revenues of $220M; however, actual sales reached only about $55M.
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