AI startup Builder has been issued with a winding up petition by a PR firm over unpaid debt, following the company’s collapse into insolvency and reports it inflated sales revenues.
Once one of Europe’s buzziest AI startups, Builder raised more than $500m from a host of big-name investors, including Microsoft and the Qatari Investment Authority, promising to help clients build customised apps using the technology.
The filings, accessed via Caseboard, show Unity Marketing Ltd, represented by law firm Spencer West, issued Builder’s UK entity with a winding up petition on July 17. Sifted understands Unity Marketing had previously undertaken public relations work for Builder.
Winding up petitions are used by creditors to force debtors into liquidation if they fail to pay debt.
Sifted has approached Builder, Unity Marketing and Spencer West for comment.
Builder last raised in a $250m round in May 2023 amid the AI boom following the release of ChatGPT.
But in March this year, Sachin Dev Duggal, the company’s founder and self-proclaimed “chief wizard”, resigned as CEO. Within months of his departure, Builder’s US entity entered insolvency, after creditors seized company funds.
Builder’s new CEO Manpreet Ratia then hit out at the company’s lenders — claiming their “unexpected and irreversible action” triggered its collapse — in a leaked memo seen by Sifted.
Reports in the Financial Times and Bloomberg suggesting lenders had uncovered “potentially bogus” sales at the company, which resulted in revenue forecasts being slashed.
