Hundreds of employees from Builder.ai, one among the UK’s best-funded technology start-ups, gathered last summer in Vietnam for a lavish “off-site” company meeting.
At a five-star hotel within the centre of Ho Chi Minh City, they were treated to performances by local dancers and DJs. Chief executive and founder Sachin Dev Duggal, shadowed at times on the trip by a private bodyguard, took to a stage to interview figures similar to former Apple executive Tony Fadell and Serena Williams’s former tennis coach Patrick Mouratoglou.
There was much to have fun. Just weeks earlier, Builder.ai had been valued at just over $1bn following a brand new $250mn investment round led by Qatar’s sovereign wealth fund. QIA had joined investors including Microsoft, SoftBank and Insight Partners, who had backed the start-up’s promise to make use of artificial intelligence to automate features of the expensive and labour-intensive task of constructing recent apps.
As the launch of OpenAI’s ChatGPT just a few months earlier sparked a generative AI frenzy, Builder.ai appeared well set to learn from the rise of the cutting-edge technology. Yet, on the time, Duggal was dogged by a legal battle from his past.
Months before the Vietnam trip, Indian authorities had named him and his former business partner Saurabh Dhoot in relation to high-profile criminal probes over past business dealings unrelated to Builder.ai, the Financial Times reported in March.
Interviews with almost 50 people including employees, customers and others who’ve worked with Duggal, reveal he has also fought a series of other legal disputes during his profession, including at Builder.ai.
Some of those people added that Builder.ai has faced other problems, from difficulty in retaining some staff attributable to the corporate’s hard-charging culture, to complaints over the corporate’s services and its ability to deliver on time.
Despite these travails, Duggal, who refers to himself because the start-up’s “chief wizard”, has enjoyed astonishing success.
His company has secured about $450mn in backing — a testament to what some describe as his vision, intellect and skill to construct a powerful network of contacts, including musician Will.i.am and late Deutsche Bank CEO Anshu Jain.
Now, Duggal faces his biggest test. With vast sums at his disposal, Builder.ai’s chief must prove to his backers that he can turn a promising idea right into a well-run business that delivers on its hype.
This is the story behind the wild ride of one among Britain’s hottest tech unicorns — and the tumultuous profession of its driving force.
An early cloud pioneer
As a teen, Duggal built and sold computers, using his technology expertise to clinch an internship at Deutsche Bank aged just 17.
While there, Duggal impressed bankers greater than twice his age together with his grasp of technology and financial markets, persuading a few of them to back his cloud computing enterprise, Nivio.
Nivio registered a number of the first global “cloud” computing trademarks and was chosen as a 2009 technology pioneer on the World Economic Forum in Davos.
“The concept behind Nivio was essentially cloud computing that went on to be an enormous thing,” one person involved with the business said. “There were numerous reasons to consider this had a brilliant future.”
Nivio’s Indian entity secured a $3.8mn loan from Videocon — the Indian electronics group that was run by the family of Saurabh Dhoot, people involved said.
Like other tech start-ups, Nivio was losing money, a number of the people involved said, but caught the eye of American telecommunications tycoon Al Cinelli, who invested at the very least $13mn in the corporate.
Tensions soon broke out. Cinelli accused Duggal of getting donated $49,500 of cash from Nivio’s parent company to a star-studded New York gala raising money for the charity of pop star Alicia Keys, without securing the right permission. Duggal later reimbursed the corporate.
Duggal’s lawyers said Nivio’s chief financial officer approved his payment to Keys’s charity and that the cash was used to purchase seats for Nivio’s business contacts and a Nivio advert. They added that Duggal’s repayment was not an admission of liability.
Cinneli confronted Duggal over other disputed payments and Duggal stepped down as Nivio’s chief, afterwards saying he resigned under duress.
Nivio’s parent company filed a criminal grievance in Switzerland over a variety of bank card expenses and transfers price half one million Swiss francs that it alleged Duggal produced from the business to his personal account without the right permission.
Nivio’s parent company was dissolved in 2015. The following yr the Swiss public prosecutor dismissed the corporate’s grievance, finding there was insufficient evidence, and ordered the state to pay Duggal’s legal costs.
Duggal’s lawyers added that he denied misusing company funds for private purposes and that transfers to his personal account weren’t improper because they were made to pay back a loan from Videocon, which in turn owed Duggal money.
It was Videocon’s transactions with Nivio’s India entity that in 2022 led the Indian authorities to summons Duggal as a witness in a wider money laundering probe into Videocon. After Duggal didn’t appear, investigators modified his designation to “suspect” and obtained a warrant against him.
Duggal denies wrongdoing and is appealing the warrant with a hearing set for later this week. His lawyers said the unique summons was invalid and maintain he’s only a witness.
Despite the corporate’s failure, in 2018 Duggal was quoted in an interview as saying he sold Nivio for $100mn. His lawyers said he had been misquoted.
The birth of Builder.ai
After Nivio, Duggal arrange other ventures before establishing Builder.ai in 2016.
With preternatural business instincts, he appeared to discover how AI could transform businesses a few years before groups similar to OpenAI took the technology mainstream. With the start-up, Duggal promised to do “to software development what Henry Ford did to automobile manufacturing”.
Like Nivio, Builder.ai enjoyed close ties with Videocon because it sought to get off the bottom. Builder.ai’s former group finance head was previously a senior manager at Videocon and brought over to Builder.ai other Videocon employees. Videocon was also a customer of Builder.ai.
Videocon collapsed into chapter 11 in 2018. Last yr the Indian Central Bureau of Investigation accused the corporate and a few of its senior leaders, including Dhoot, of loan fraud. Dhoot continues to disclaim wrongdoing.
In 2018, Builder.ai announced it had raised $29.5mn from backers including Japanese conglomerate SoftBank and European enterprise capital group Lakestar, prompting the UK’s then-trade secretary Liam Fox to spotlight the importance of the start-up to the country’s technology scene.
Despite Builder.ai’s success attracting investors, legal problems again soon emerged. Two former US employees filed separate lawsuits in California state courts alleging, amongst other things, that an entity of the business had overstated its technological capabilities.
The allegations were denied in each lawsuits. One was settled with no admission of liability, while proceedings related to the opposite are ongoing.
Soon, Builder.ai won more high-profile investors, including US private equity group Insight Partners. The firm led a $100mn investment round in 2022 and Insight’s co-founder Jeff Horing took a seat on Builder.ai’s board. Microsoft also invested.
Insight described Builder.ai as having an “almost zero failure rate” in producing apps, adding that it was in a position to achieve this “multitudes cheaper and faster” than traditional software developers.
Customers contacted by the FT had mixed experiences. Devansh Mehta, the founding father of a stock investment app, said Builder.ai did a “decent job”. Two other customers said that they had “good” experiences, with one other adding Builder.ai had “smashed it” on two projects the corporate was currently developing for them.
However, others were critical. Nishka Ranjan, who paid Builder.ai greater than $10,000 for an app connecting corporate cleansing contractors to customers, said her company missed out on business opportunities because Builder.ai delivered the app greater than a yr late. It was meant to take 4 months, she said. When it was finally released in October 2023, the login process didn’t work, she said.
Lawyers for Builder.ai said delivery of Ranjan’s app had been delayed attributable to unexpected technical challenges primarily related to third-party services she had chosen. They said the app the corporate built for her has received a whole bunch of downloads on app stores.
Anurag Gulati said he abandoned a dating app project in July 2023 having paid Builder.ai a lot of the $10,000 total project price, because he estimated only 25 per cent of the duty had been accomplished.
Lawyers for Builder.ai said Gulati paused his project when it was 90 per cent complete after giving full marks for customer satisfaction, adding that he stopped attending calls and paying invoices so it couldn’t complete his project. Gulati told the FT the complete marks were just for a small a part of the design and that if his project was really near completion, he wouldn’t have abandoned it.
There are many positive online reviews of Builder.ai’s services. In one earlier this yr the shopper said that they had “a superb experience” and “really appreciated that they were in a position to clearly understand the app I wanted built”, adding that they were satisfied with delivery timelines.
However, the FT found that some were written by the corporate’s own employees who adopted the tone of satisfied customers while recommending the platform. Lawyers for Builder.ai said the workers weren’t asked to write down the reviews but were excited in regards to the product and selected to achieve this themselves.
Builder.ai has also had issues with using logos of huge corporations without their permission. The company ran an commercial that said it had developed a prototype app for Air India. The airline later released an announcement saying the prototype had been developed without the involvement or consent of the airline.
Builder.ai used the logos of carmaker Bentley and drinks giant Pepsi on its webpage featuring customer case studies despite having only been contracted by separate Dubai-based corporations that distributed their products. People acquainted with the matter told the FT neither company had authorised the start-up’s use of their logos. Bentley’s logo has since been removed.
Lawyers for Builder.ai said the corporate had in any respect times stated its campaign was not endorsed by Air India and that the corporate obtains permission for every other use of logos. They added Bentley’s logo was published in error on the corporate’s website for 2 weeks.
A unicorn takes flight
As the corporate grew, money kept rolling in. Last May, the sovereign wealth fund Qatar Investment Authority led a brand new $250mn money injection into Builder.ai.
At the time, Microsoft, one other backer, said Builder.ai was empowering “everyone to be a developer”. Insight’s Horing praised the “tremendous results” that Duggal and his company had achieved since his firm invested a yr before.
QIA, Microsoft, Insight and Lakestar declined to comment for this text. SoftBank and a lawyer for Videocon didn’t reply to a request for comment.
Duggal enjoyed the trimmings of leading one among the UK’s hottest start-ups. He drove expensive cars, travelled by private jet and resides in a £5mn penthouse near Builder.ai’s office in Marylebone, an upmarket district of London, in accordance with individuals who know him.
The Vietnam off-site, which happened shortly after the Qatar-led funding round, captured a number of the company’s quirks.
Some employees were asked to wear colour-coded lanyards, which lawyers for Builder.ai said in some cases allowed senior management to spend more time talking to top-performing staff.
An internal app built by the corporate for the event also malfunctioned for several hours on the primary day. Duggal frolicked reading a children’s book to staff, in accordance with an itinerary of the event. Lawyers for Duggal and Builder.ai said the event received exceptional feedback from employees.
The company’s ability to boost huge sums of cash was not enough to stem what 10 former employees described as a quick turnover of some staff.
Some blamed Duggal’s variety of leadership. Former employees described Duggal yelling at his staff, berating people on calls with several attendees and interrupting people by “shushing” them.
Duggal’s lawyers disputed all of those claims, saying the work at Builder.ai is “fast-paced” and “could be cutting-edge”. They added that employees are “encouraged to answer that environment”.
Builder.ai’s chief wizard appears unfazed by the challenges. Earlier this month, he appeared on stage on the annual Milken Institute conference, which featured luminaries from the worlds of tech and finance, similar to Tesla chief Elon Musk.
There, Duggal issued a warning to potential investors in AI start-ups.
“AI unfortunately has a lot information asymmetry,” he told the audience. “The folks that may write the really large cheques are up to now faraway from what the potential of possible (and) impossible, hoax and real, that it’s making a hype which is making it hard for folk which are actually also doing something.”
