When we started covering Builder.ai a few years ago, the startup was tapping into a new wave of businesses wanting their own native apps. The previous wave of agency-built and outsourced apps was waining, and Builder.ai realized it could tap into this trend by creating a turnkey, almost drag and drop approach, at least on feature requests. In 2019 it raised one of Europe's largest Series A investments at the time, at $29.5 million, led by Lakestar and Jungle Ventures.
Then came the pandemic. With the rapid digitization of our entire existence, borne of the need to socially distance, business raced online, and Builder.ai saw its moment. It capitalized by launching pre-packaged apps '” beginning with e-commerce and delivery '” aimed specifically at small businesses hit by the COVID-19 pandemic.
The strategy worked. By the beginning of 2021 it said it had experienced a 230% increase in monthly revenue since the start of the pandemic.
That combination of being on-trend and doubling down on the pandemic-driven shift of business online has now led to a $100 million Series C funding round. The round was led by Insight Partners, a New York-based global venture capital and private equity firm. The round, which brings the company's total funding to $195 million across three total rounds, includes participation from existing investors in combination with new individual and institutional names that include the IFC & Jeffrey Katzenberg's WndrCo and Nikesh Arora (CEO at Palo Alto Networks).
Established in 2016 originally as Engineer.ai, Builder.ai developed what it called an 'œAI-powered low-code/no-code app development platform. This now claims to be able to build software and apps up to 6x faster and up to 70% cheaper than '˜traditional' human teams, 'œwithout users needing to speak tech.'
However, those claims led others to look under the hood and question what sounded a little like marketing hype.
According to a report from The Wall Street Journal in 2019, the company was relying mostly on human engineers who were merely directed by an AI platform in a more efficient manner that previous generations of work-allocation software. The report claimed Builder. ai was using hype around the AI subject to attract customers and investment as a '˜bridge' before it could get its automation platform up and running. In fact, the company was sued in 2019 by its chief business officer, Robert Holdheim, who claimed the company had exaggerated its AI abilities to gain funding.
But the controversy may well have come down to terms and definitions. Although Builder.ai may not have been using AI to assemble the direct code and instead using remote-working engineers to build the apps (something which it actually never denied in my experience), it was clearly using machine learning to speed up and automate large swathes of both customer interaction and engineer assignments.
Whatever the case, the startup has now assembled a large number of software tools to gradually automate large parts of software and app building, 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.
This will include a new conversational AI, named 'œNatasha' as a self-service bot.
In a statement, Sachin Dev Duggal, Co-Founder of Builder.ai, said: 'œOur choice of investor for this round was very deliberate; we wanted someone who had deep insight and immense courage to let us think and do differently. This led us to the only natural choice '“ Jeff Horing and Insight Partners.'
'œBuilder.ai has spearheaded a new category in the low-code/no-code industry with an innovative business model and clarity of vision, fueling its 300% growth in the last year,' said Jeff Horing, Co-Founder and Managing Director at Insight Partners. 'œI've been speaking with Sachin from the early days of Builder.ai and have witnessed how he and the team have built something very special. By truly democratizing access to complex software, Builder.ai is set to disrupt the core of how applications are built.'
Klaus Hommels, Founder and Chairman, Lakestar, added: “Builder.ai is one of those rare companies that has entered a brand new category; with technology that has a disruptive impact to the world around us; especially as companies continue the move to being digital-first.