Around 200 former UK employees of Builder AI remain unpaid after the tech company’s collapse in May. Despite filing for bankruptcy in the US, the company has not entered administration in the UK. This delay blocks ex-staff from claiming redundancy pay through the Insolvency Service, which requires a UK case number.
Builder AI, once valued at over £1bn, had pitched itself as a leader in “human-assisted AI.” Its chatbot Natasha, supported by human contractors, helped clients like the BBC build custom apps.
But the business unraveled after sales figures fell far below promises made to investors.
The company projected $220 million in 2024 revenue. Actual sales were closer to $50 million.
In February, founder Sachin Dev Duggal was removed and replaced by Jungle Ventures’ Manpreet Ratia.
Shortly after, lenders pulled $40 million from the firm’s accounts, citing covenant breaches.
Since then, workers say communication has stopped. “There’s been no communication, no proper closure,” said one former employee. “Without the right paperwork, a lot of us still can’t access the financial help we need.”
Many have received no pay since April.
Builder AI is now in talks over a “pre-pack” administration deal. This would allow its remaining assets to be sold quickly. Restructuring firm Alvarez & Marsal is expected to lead the process.
Investors involved include Jungle Ventures, Lakestar, and Insight Partners.
A spokesperson for Builder AI said the company is “working closely with the US administrator” to begin UK liquidation. Filings are expected in the coming weeks.
Meanwhile, legal scrutiny is growing. New York prosecutors reportedly issued a subpoena to Builder AI before its collapse. Investigations have raised concerns over inflated sales and circular transactions.
Duggal has denied wrongdoing, saying on LinkedIn: “There was no round-tripping.”
Until formal steps are taken in the UK, staff remain stuck without pay, answers, or support.