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Builder.ai’s founder Sachin Dev Duggal has sounded out investors on a potential deal to buy the failed UK software company out of insolvency.
The Microsoft-backed artificial intelligence start-up, which was once valued at over $1bn, told employees earlier this week that it would commence insolvency proceedings owing to “historic challenges and past decisions”.
Duggal, who stepped down as chief executive earlier this year but retained his board position and title of “chief wizard”, has approached multiple investors about potentially buying back the company he founded, according to two people with knowledge of the discussions.
Duggal’s recent pitch to one investor, details of which were shared with the FT, outlined an opportunity to either acquire Builder.ai’s assets or strike a so-called pre-packaged deal, a form of a UK insolvency in which a sale of the business is agreed before administrators are formally appointed.
Duggal further explained that he thought this deal would require less than $10mn in initial funding, with $25mn needed before the company has to raise money again.
He also suggested the company had investors willing to invest at a $1.8bn valuation only 90-days ago, before its financial unravelling began in earnest.
Builder.ai’s main units are in the US and the UK, with further subsidiaries in regions such as India and Singapore. It has plans to file multiple insolvency proceedings in several jurisdictions, according to people familiar with the matter.
Any efforts to buy back the company’s assets could be complicated by the fact that Builder.ai pledged much of its intellectual property to a group of lenders in October. These lenders helped trigger Builder.ai’s collapse by recently calling a default on this $50mn facility.
The FT reported earlier this week that Builder.ai collapsed after an internal investigation found evidence of potentially bogus sales and indicated that there may have been a concerted effort to inflate revenues.
Prior revenue figures previously submitted to the board under the leadership of Duggal were heavily written down.
Builder.ai had claimed it could use artificial intelligence to make the process of building an app or website “as easy as ordering pizza”.
That pitch had drawn in some of the most prominent technology investors in the world — including Insight Partners and an AI-focused unit of SoftBank — to pour over $500mn into the company.
The FT reported earlier this week that some of its shareholders put in $75mn earlier this year in a bid to rescue the company as it faced dwindling cash balances and mounting debts.
Duggal and Builder.ai did not immediately respond to requests for comment
