When we started covering Builder.ai a few years ago, the startup attracted the attention of a new wave of companies that wanted to have their own native apps. The previous wave of agency-built and outsourced apps was on the wane, and Builder.ai felt it could at least jump-start that trend by creating a turnkey, almost drag-and-drop approach to feature requests. In 2019, the company raised one of Europe’s largest Series A investments, led by Luxtar and Jungle Ventures, worth $29.5 million.
Then came the pandemic. With the rapid digitization of our entire existence driven by the need for social distancing, everything has moved online and Builder.ai has its moment. This was facilitated by the launch of pre-packaged applications, starting with e-commerce and delivery, specifically aimed at small businesses affected by the COVID-19 pandemic.
The strategy worked. In early 2021, the company said it had seen a 230% increase in monthly revenue since the start of the pandemic.
The combination of being on trend and doubling down on the pandemic-induced change in online business has now led to a $100 million Series C funding round. The round was led by Insight Partners, a global venture capital and private equity firm headquartered in New York. The round, which brings the company’s total funding to $195 million in three rounds, includes participation from existing investors as well as new individual and institutional names including Jeffrey Katzenberg’s IFC, WndrCo and Nikesh Arora (CEO of Palo Alto Networks).
Originally founded in 2016 as Engineer.ai, Builder.ai has developed a so-called “low/no-code AI-based application development platform”. The company now claims to make software and apps up to 6x faster and up to 70% cheaper. Compared to “traditional” human teams, “not talking to users about technology.”
However, these claims have prompted others to look under the hood and wonder what the marketing hype looked like.
According to a 2019 report by The Wall Street Journal, the company relied primarily on human engineers who… directed The AI platform is more efficient than previous generations of task assignment software. This is stated in the developer’s report. AI used the hype around the topic of AI to attract customers and investments as a “bridge” before its automation platform was up and running. The company was also sued in 2019 by its chief commercial officer, Robert Holdheim, who alleged that the company exaggerated its AI capabilities to secure funding.
But the dispute may well come down to terms and definitions. While Builder.ai would not have used AI to create direct code, but would instead have hired remote engineers to build applications (which has never been ruled out in my experience), it was clearly a machine. customer interaction and engineering assignments.
Be that as it may, by now the startup has accumulated a large number of software tools to gradually automate most of the software and create applications, hence the new funding from new investors.
Builder.ai says it has now increased its revenue by over 300% and the capital raised will be further invested in the AI and automation capabilities of its low-code/no-code platform.
It includes a new conversational AI called “Natasha™” in the form of a self-service bot.
In a statement, Sachin Dev Duggal, co-founder of Builder.ai, said: “Our choice of investor for this round was very considered; We wanted someone with deep understanding and great courage to inspire us to think and act differently. The only natural option: Jeff Horing and Insight Partners.”
Co-founder and CEO Jeff Horing said, “Builder.ai has pioneered a new category in the low-code/no-code industry with an innovative business model and a clear vision that is up 300% year over year. has grown.” At Insight Partners. “I’ve been talking to Sachin since the early days of Builder.ai and have seen him and his team create something truly special. By truly democratizing access to complex software, Builder.ai will change the essence of building applications”.
Klaus Hommels, founder and president of Luxtar, said: “Builder.ai is one of the few companies that has entered a completely new category; With technologies that have a devastating effect on the world around us; Moreover, companies continue to move towards digital technologies.