The Microsoft-backed startup, which boasted it could make app development “as easy as ordering pizza,” is heading into insolvency after it admitted its much-hyped revenues were more mirage than money. The board’s spellbook once showed $220 million in 2024 revenue. Turns out the real figure was closer to $55 million. The 2023 numbers also shrank from $180 million to $45 million after the auditors had a peek behind the curtain at the Wizard's numbers.

Duggal stepped down as CEO earlier this year, dragging the chief revenue officer with him, but kept his seat on the board and the title of “chief wizard” as if that might still impress the bankers. Unfortunately, the only thing he seems to have conjured is a financial disaster.

Lenders were already suspicious after stacks of so-called sales remained unpaid for months. An internal investigation commissioned by the new leadership found that some of those sales were little more than smoke and mirrors. The probe focused on “resellers” in the Middle East, who were meant to be shifting Builder.ai’s wares. In reality, many appear to have been figments of someone’s imagination.

The law firm behind the investigation concluded that there may have been a concerted effort to inflate revenues. In other words, the chief wizard’s spellbook might have been less Dumbledore and more dodgy ledger.

Builder.ai had raised more than \$500 million, pulling in blue-chip backers including Qatar’s sovereign wealth fund and Microsoft. It also borrowed $50 million from a syndicate led by Viola Credit, Atempo Growth and Apollo-backed Cadma Capital Partners. When the dodgy accounts landed, the lenders pulled the plug and seized the firm’s cash.

Now the magic’s gone, the startup’s castle has crumbled, and there does not even appear to be 1D20 worth of gold.