Hundreds of UK-based employees have fallen victim to the infamous collapse of unicorn Builder.ai as they remain unable to access redundancy payments.
The AI startup filed for bankruptcy in the US two months ago but failed to appoint administrators in Britain, meaning around 200 former UK staff are ineligible for government redundancy support.
The Insolvency Service requires a case number issued during formal administration proceedings to process claims.
“There’s been no communication, no proper closure, and without the right paperwork, a lot of us still can’t access the financial help we need,” said one former employee.
A spokesperson for Builder.ai acknowledged the situation and told The Telegraph that the company is ‘aware of the frustration’ and in ‘advanced talks’ with investors and creditors about a potential pre-pack administration.
It has reportedly lined up Alvarez & Marsal to manage the process and expects to proceed with formal UK filings ‘in the next couple of weeks’.
Founded in 2016 by Sachin Dev Duggal (pictured, main image), Builder.ai promised to democratise software development through its “human-assisted AI” platform.
It secured major backing from Microsoft and Qatar’s sovereign wealth fund, and hit a $1.5bn valuation in 2023.
In March 2025, though, Duggal stepped down as CEO following reports of inflated sales forecasts.
Lenders uncovered what were described as ‘potentially bogus’ revenues, prompting them to withdraw tens of millions of dollars in funding. The company filed for US bankruptcy shortly after.
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Builder.ai was forecasting $220m in revenue for 2024 when raising funds but only delivered around $50m.
The London-based firm had claimed to have built a neural network named ‘Natasha’ which would make building an app ‘as easy as ordering a pizza’.
Following the revenue collapse, Duggal was replaced by Manpreet Ratia, a managing partner at Jungle Ventures.
Self-proclaimed ‘chief wizard’ Duggal was due to speak at the RAISE Summit in Paris on Tuesday, in what would have been his first public appearance since his startup’s collapse.
However, the organisers cancelled his participation at the last minute.
A spokesperson for RAISE told Sifted: “We took the numerous emails we received very seriously — including those regarding employees losing their jobs and allegations of serious fraud.
“Given the security concerns and the fact that we did not have full clarity on the story, we ultimately decided not to move forward with featuring him at the event.”