Lessons for US Companies and the Case for Vendor Management Systems
Builder.ai: From Unicorn to Insolvency
Builder.ai, once hailed as a revolutionary force in no-code and AI-driven software development, captured the tech world’s imagination with its promise to make app creation as simple as ordering a pizza. Founded in 2016 and backed by major investors like Microsoft and the Qatar sovereign fund, the company soared to a $1.5 billion valuation at its peak.
However, beneath the surface, serious issues were brewing:
- Faked AI Claims: Despite publicizing a powerful AI named Natasha, investigations revealed that much of the actual work was done by hundreds of human developers in India, not by AI as advertised.
- Revenue Inflation and “Round-Tripping”: Builder.ai allegedly engaged in “round-tripping” with Indian firm VerSe Innovation—exchanging invoices without genuine services to artificially inflate sales and impress investors.
- Questionable Leadership: Sachin Dev Duggal, the charismatic founder and CEO, was central to both the company’s meteoric rise and its downfall. Under his leadership, the company overstated sales projections by as much as 300%, misled investors, and failed to deliver promised products to customers.
- Customer Disillusionment: Many customers reported delayed or incomplete software deliveries, while others questioned the transparency and reliability of Builder.ai’s offerings.
- Legal and Financial Fallout: As audits and media reports exposed the company’s practices, investors and lenders lost confidence. The company filed for insolvency in May 2025, and US authorities initiated investigations into its financial dealings.
How Mr. Duggal Misguided Customers
Sachin Dev Duggal’s leadership style was marked by bold promises and aggressive marketing. While he positioned Builder.ai as an AI-first platform, the reality was a hybrid model heavily reliant on human labor. Customers were led to believe they were purchasing cutting-edge AI solutions, but many received delayed or incomplete projects, and some never received the code they paid for. Internal governance failures, including rapid auditor turnover and the absence of a permanent CFO, further eroded trust. Ultimately, Duggal’s approach prioritized hype over substance, leaving customers and investors disillusioned.
Why US-Based Companies Need a Vendor Management System (VMS)
The collapse of Builder.ai underscores the risks of relying on opaque vendors and the importance of robust vendor oversight. For US-based companies, a Vendor Management System (VMS) like Vendor Nirvana’s offers essential safeguards and strategic advantages.
Key Benefits of a VMS
- Increased Efficiency: Automates tasks like invoicing, performance evaluations, and vendor selection, reducing manual errors and saving time.
- Enhanced Vendor Performance: Tracks and benchmarks vendor performance, enabling proactive management and ensuring service level agreements are met.
- Cost Savings: Streamlines procurement, optimizes contract negotiations, and exposes hidden costs, directly improving the bottom line.
- Improved Risk Management: Ensures vendors comply with contracts, regulations, and industry standards, reducing the risk of fraud or non-compliance.
- Greater Transparency: Provides real-time visibility into vendor relationships and spend, helping companies avoid the pitfalls that contributed to Builder.ai’s downfall.
- Global Compliance: Assists in managing vendors across multiple jurisdictions, ensuring adherence to local laws and standards.
Why Choose Vendor Nirvana?
Vendor Nirvana’s VMS is designed to address the specific needs of US companies by:
- Automating onboarding, contract management, and compliance monitoring
- Providing robust analytics and reporting for strategic decision-making
- Ensuring data security and regulatory compliance
- Facilitating seamless collaboration between internal teams and external vendors
Conclusion
The story of Builder.ai is a cautionary tale about the dangers of unchecked vendor relationships and the importance of transparency, accountability, and robust management systems. For US companies, adopting a VMS like Vendor Nirvana’s is not just a matter of efficiency—it’s a strategic imperative to safeguard against risk, drive performance, and ensure sustainable growth in an increasingly complex business environment.
