The finger pointing has begun after Builder.ai, a Microsoft-backed AI start-up that boasted about its mobile app development tools, announced it had entered insolvency proceedings.
It's a huge fall for a company that once achieved unicorn status, receiving a valuation of more than $1 billion.
“This story holds significant relevance as the company undergoes bankruptcy proceedings,” a high-level Builder.ai employee told The National.
“Its founder, Sachin Dev Duggal, who has since moved to Dubai, has also been a prominent speaker at many conferences across the region, contributing thought leadership to the tech and business community,” the employee said in an email.
Mr Duggal was removed as chief executive from the London-based start-up back in March, although he curiously retained an association with the company, along the title of Chief Wizard.
In 2024, when Builder.ai was flush with investor cash and in the tech world's good graces, Mr Duggal briefly spoke to The National as he appeared at an event hosted by the Dubai Multi Commodities Centre, which had just announced a new AI centre.
“With this centre, we're helping to unveil a portal to global commerce,” he said at the time, reflecting on why Builder.ai chose DMCC as an ecosystem partner.
“We didn't want to be a software company just surrounded by other software companies, we wanted to be surrounded by potential customers and peers,” Mr Duggal added, referring to DMCC's reach and partnerships with gold, diamond, tea, coffee, crypto and gaming entities, to name a few.
According to employees and media reports, Builder.ai failed to meet revenue expectations. It had promised to make mobile app development as “easy as buying a pizza” but struggled to create reliable products, disappointing investors like Microsoft and sovereign wealth funds in Qatar.
Mr Duggal requested additional investment funds, as well as an emergency loan just months before he was stripped of the chief executive title.
Audits later revealed a high likelihood that sales projections had been fudged, causing concern about other potential financial irregularities.
Today, the company's website is blank, except for listing two email addresses.
Builder.ai's LinkedIn page, which has 288,000 followers, turned off the comment section for a post announcing the company's insolvency proceedings.
“Despite the tireless efforts of our current team and exploring every possible option, the business has been unable to recover from historic challenges and past decisions that placed significant strain on its financial position,” the post reads.
“We will work closely with the appointed administrators to ensure an orderly process and to explore all available options for parts of the business, where possible.”
However, unhappy comments still surfaced on other parts of the company's LinkedIn page.
“What are you doing to get all of your customers their code for completed apps they paid for?” one person wrote.
“Don't believe these fancy conferences, flying around, inviting celebrities … Its all hype and nonsense,” wrote another, seemingly referring to the various events where the former chief executive appeared and bestowed start-up wisdom in the UAE, Qatar and elsewhere.
It's unclear if there will be any surviving pieces of intellectual property that might help Builder.ai survive in a different iteration. The company has quickly become a cautionary tale of high-flying AI expectations meeting the realities of a competitive and crowded tech market.
Mr Duggal, whose confidence and bold projections helped to put Builder.ai on the map did not immediately respond to The National's requests for comment.
He did, however, post some thoughts on a Builder.ai alumni LinkedIn group.
"I don’t think the story is done yet, but irrespective if I can be of any help to any of you as you make this transition in life please know I’m I’m only a message away," he posted in part.
"And more importantly - if I didn’t listen, if I was short, if I was unreasonable - I’m sorry."
In the UAE, the DMCC, with which Builder. AI had an “ecosystem partnership”, said it was evaluating developments.
“We are aware of the reports concerning Builder.ai, one of several ecosystem partners of the DMCC AI Centre,” read a statement from the DMCC's head of public relations.
“We are actively assessing the situation and working to establish what impact, if any, this may have on our ecosystem partnership. For now, our operations and service delivery continue as normal and we remain focused on supporting our members.”
Afcon 2019
SEMI-FINALS
Senegal v Tunisia, 8pm
Algeria v Nigeria, 11pm
Matches are live on BeIN Sports
Scoreline
Bournemouth 2
Wilson 70', Ibe 74'
Arsenal 1
Bellerin 52'
Scoreline
Al Wasl 1 (Caio Canedo 90 1')
Al Ain 2 (Ismail Ahmed 3', Marcus Berg 50')
Red cards: Ismail Ahmed (Al Ain) 77'
AWARDS
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The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The%20specs
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VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
