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Investing.com -- Builder.ai, a London-based artificial intelligence startup backed by Microsoft Corp (NASDAQ:MSFT). and the Qatar Investment Authority, has revised its sales figures downward and has initiated an audit of its accounts from the past two years, according to Bloomberg, citing the company’s CEO. This move follows concerns raised by former employees that the company had inflated its sales figures.
The company, which has secured over $450 million in funding, reduced its revenue forecasts for the second half of 2024 by approximately 25%. This adjustment was made after certain sales channels failed to materialize, according to the newly appointed CEO, Manpreet Ratia. The company confirmed this adjustment in response to inquiries from Bloomberg News regarding the sales correction.
In his first interview as CEO, Ratia stated it was time for the company to reassess its situation and ensure its operations were in order. Builder.ai, which has been in operation for nine years, assists businesses in developing customized apps with minimal or no coding.
The company’s recent actions highlight the potential risks involved in investing in promising AI startups. Builder.ai had previously garnered investor enthusiasm in the wake of the success of companies like OpenAI and Anthropic. This led to significant funding, including a $250 million financing round in 2023 led by Microsoft and the Qatar Investment Authority.
Several former employees, who wished to remain anonymous, claimed that Builder.ai had inflated its sales figures by more than 20% compared to actual bookings on multiple occasions. Ratia suggested that these discrepancies could be due to the discounts offered to customers by Builder.ai. The CEO stated that he was not in a position to declare these figures inaccurate and that the upcoming audit report would provide clarity. The audit is expected to be completed by this summer.
When questioned about potential fraud, a company spokesperson stated that Builder.ai has enhanced its internal policies and governance processes to ensure transparency and best practices. The company emphasized that addressing challenges is of utmost importance.
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