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London based startup Builder.ai, which provides an AI powered composable software platform, has reportedly hired two of the Big Four auditing firms to go through its finances from 2023 and 2024. The company announced the audit after lowering its revenue estimates for the second half of 2024 by 25%, and after unnamed former employees alleged that it inflated sales figures (as reported by Bloomberg).
Builder.ai was founded in 2016 and provides an AI software platform whose assembly line combines together Lego-like reusable features, using a combination of automation and AI alongside human expertise, to produce apps cheaper and faster than traditional software development. It offers even the non-tech savvy an easy way to create the app they envisage without the need to hire expensive app developers and project managers.
The company raised $250m in a Series D funding round in May 2023, saying it planned to invest in talent, partnerships and technology to expand its platform (See - Builder.AI raises $250m to revolutionise app development). The company also appointed Manpreet Ratia as CEO in February. Ratia told Bloomberg that the company is working to make sure it has its “house in order” and that the discrepancies in the sale reporting could be due to discounts the company provides to customers. Builder.ai expects the full audit to be completed by this summer.
The tech sector continues to face rising uncertainty, Builder.ai’s financial issues highlight the risks investors face when supporting innovative startups and the need for strong due diligence. Coupled with the more competitive and crowded market AI firms find themselves in, equity investors have been putting more scrutiny on solid financials and clear differentiators when choosing where to place their bets.
