01:45 PM EDT, 05/22/2025 (MT Newswires) -- Microsoft ( MSFT ) -backed Builder.ai collapsed followed an internal inquiry, which found that the company's former executives allegedly reported "bogus" sales to the board, The Financial Times reported Thursday, citing people close to the matter.

The provisional accounts submitted by the technology startup to its auditor showed that the company revised its 2024 revenue estimates to about $55 million from a previously reported estimate of $220 million. It also reduced its previously reported 2023 total sales revenue of $180 million to about $45 million, the report said, citing the people.

The prior revenue figures were submitted to the board when founder Sachin Dev Duggal was CEO, the report said. Duggal resigned as CEO along with Builder.ai's Chief Revenue Officer Varghese Cherian in early 2025, according to the report.

The people familiar with the matter said that sales, which were previously booked, remained outstanding for an extended period of time due to Duggal's departure, raising concerns regarding revenue recognition. This eventually led to hiring of a law firm by the board to investigate the matter. The law firm shared its findings, which showed that there may have been a coordinated effort to inflate revenue at the company, the report said.

Builder.ai said Tuesday it would enter insolvency proceedings and appoint an administrator to oversee the company's affairs.

Builder.ai didn't immediately respond to a request for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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