Builder.ai Initiates Third-Party Audit Amid Revenue Estimate Revisions and Sales Inflation Allegations

Builder.ai Announces Third-Party Audit After Allegations of Inflated Sales Figures | PYMNTS.com

Artificial intelligence (AI) startup Builder.ai 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, Bloomberg reported Monday (March 31). Manpreet Ratia, who became CEO of Builder.ai on Feb. 27, 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. "For me to come out and say, 'This is inaccurate' -- I don't think I'm at the stage to do that," Ratia said, per the report. "When the audit report comes out, it will tell me everything." Builder.ai expects the full audit to be completed by this summer, according to the report. A company spokesperson told Bloomberg that Builder.ai has strengthened its internal policies and governance processes and that "while challenges can arise in any company, what matters most is how they are addressed," per the report. The company's recent CEO transition was unrelated to the revenue adjustments, the spokesperson said in the report. When announcing the appointment of Ratia as the company's CEO on Feb. 27, Builder.ai said in a press release that the move was aimed at driving the company's next phase of growth by focusing on innovation and operational excellence. The company added that founder Sachin Dev Duggal will continue to serve on the board and as "founder and chief wizard." Ratia said in the release: "My focus will be on ensuring that we scale effectively, execute with operational excellence, and continue to drive value for our customers, employees and investors." Builder.ai's AI-powered composable software platform helps companies develop apps at "a fraction of the cost and time of traditional software development," the release said. The company raised $250 million in a Series D funding round in May 2023, saying it planned to invest in talent, partnerships and technology to expand its platform. That round brought the total amount raised by Builder.ai to over $450 million, the company said at the time in a press release.

Builder.ai revises sales estimates and initiates audit - Bloomberg By Investing.com

Investing.com -- In a significant development, artificial intelligence startup Builder.ai has reduced its sales figures previously shared with investors and has engaged auditors to scrutinize its accounts for the past two years. The company, backed by Microsoft Corp (NASDAQ:MSFT). and the Qatar Investment Authority, is based in London and has raised over $450 million in funding. This adjustment, which was initiated last summer, was confirmed by Builder.ai in response to inquiries from Bloomberg News regarding the sales correction and allegations from former employees about inflated sales figures. The company has reduced its revenue estimates for the second half of 2024 by approximately 25% due to some sales channels not performing as expected. Manpreet Ratia, the newly appointed CEO, spoke about this decision during his first interview as the head of the company. Builder.ai, which is nine years old, aids businesses in designing customized apps with minimal to no coding. Ratia indicated that it might be the appropriate time for the company to reassess and ensure its operations are in order. He stated, "It's probably time to sit back and take pause. We need to do a little bit of work making sure we get our house in order."