Behind The Collapse Of Builder.ai, Cost Of 12-Hour Workday & More
Once backed by giants like Microsoft and QIA, Builder.ai’s horizons look bleak. The no-code AI platform is grappling with insolvency proceedings amid allegations of faking its tech, inflating sales and round-tripping of funds.
Tracing A Unicorn’s Fall: Having raised $450 Mn+ over its lifetime, Builder.ai fell prey to weak internal controls and lapses on the tech front. The final blow came earlier this year, when a creditor, alleging breach of loan covenants, restricted access to nearly $40 Mn in debt funding. Left with a mere $5 Mn in funds, the company was forced to lay off all its employees.
The AI Imposter: Builder.ai created an AI illusion from the outset, which ultimately led to its downfall. What’s rather strange is that the company had employed an army of 700 non-payroll engineers, who would code manually for its clients. Everything started falling apart when the company saw an exodus of its clientele due to below-average software, often delivered late.
The Domino Effect: Customers started ending their association with Builder.ai in the middle of their projects. The failure to record this properly in the books led to revenue inflation. The FY24 adjusted revenue was amended to $55 Mn from $220 Mn, while FY23’s top line was trimmed down to a mere $45 Mn against $180 Mn.
The Round-Tripping Saga: The company is also said to have faked giving services to Josh and DailyHunt parent VerSe Innovations by producing sham bills.
All of this has now brought Builder.ai under the radar of US regulators. It now has a debt albatross of more than $120 Mn around its neck. With literally zero tech stack or a few IPs to take over, investors may have to write off their entire investment in the company. Follow to trace Builder.ai’s fall from grace.
From The Editor’s DeskBluSmart App Goes Offline: Months after it suspended cab services, the EV ride-hailing startup’s app is crashing and non-operational on Android and iOS devices. BluSmart has been hit by a financial crunch, with allegations of fund diversion levelled against its cofounders.
The Cost Of 12-Hour Workday: Karnataka has proposed to extend the working hours to 12 hours a day, while Andhra Pradesh has capped the working hours at 10 to increase output and economic growth. But, do long working hours really result in productivity?
Meesho Rejigs Board: The IPO-bound ecommerce major has appointed Peak XV’s Mohit Bhatnagar and Elevation Capital’s Mukul Arora on its board. Meanwhile, SoftBank and Prosus Ventures have relinquished their board seats. This comes as Meesho gears up for a $800 Mn IPO.
GoKwik Bags $13 Mn: The ecommerce enabler has raised the capital in a round led by RTP Global, with participation from Z47, Peak XV Partners, and Think Investments. The startup provides checkout tools to ecommerce platforms for increasing conversion rates.
Fabheads Nets $10 Mn: The deeptech startup has raised the capital in its Series A round led by Accel, with participation from Trifecta Capital. Fabheads offers designing, prototyping, production, and certification services for carbon fibre and composite components.
Darwinbox’s $10 Mn ESOP Buyback: The HR tech unicorn has completed its third ESOP buyback programme, benefitting 350 employees across geographies. Darwinbox is a cloud technology platform that automates day-to-day HR processes.
India’s GPU Plan In Motion: India has completed the installation of over 17,300 GPUs under the IndiaAI Mission. While Jio Platforms and CtrlS Datacenters are yet to deploy their chips, Yotta, NextGen Cloud and E2E Networks have made major headway.
Reshuffle At Mirae’s VC Arm: The CEO of the investment firm, Ashish Dave, has stepped down after a seven-year stint. He will be relieved from his responsibilities in the coming months. The VC firm has invested in companies like Unacademy, Jupiter, Zomato, and Zolo.
Inc42 Startup Spotlight How ParvAI Labs Is Changing Human-Machine Interaction With Vision IntelligenceImproving human efficiency and enhancing decision-making is a major concern when it comes to industrial safety and critical missions such as air traffic and emergency response. Founded in 2022, ParvAI Labs leverages AI-powered eye-tracking and vision analytics technology to bridge this gap.
Power Of Vision Intelligence: The Chennai-based startup uses its proprietary mechanism, which enables highly accurate monitoring of eye movements, thereby generating AI-based insights on fatigue, attention and engagement in humans.
The startup’s solutions are designed to cater to high-performing sectors like aviation, defence, logistics, and industrial operations, where monitoring human focus and performance is essential for improving safety, efficiency and decision-making.
Gaining Ground Steadily: ParvAI’s solutions are used by the likes of DRDO, Pfizer, BARC, FedEx, and ISRO. The startup aims to capture a big chunk of India’s broader AI market, which is expected to become a $17 Bn opportunity.
Backed by its AI tech stack, can ParvAI Labs help industries reduce operational errors and optimise workflows?
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