Bobble AI Files for Insolvency After Missing Investor Repayment

Bobble.AI, the Indian AI-powered communication and data intelligence startup, has entered insolvency proceedings, Entrackr reported.

Bobble AI, founded 12 years ago by Ankit Prasad and Rahul Pandey, has raised around $35 million, including $26 million from Krafton in 2022. Its products include an AI-powered Indic keyboard supporting more than 120 languages, alongside personalised GIFs and stickers.

It also raised Rs 25 crore through secured debentures in March 2023 but began missing repayments from August 2025. Including interest, the total default stood at around Rs 5.77 crore.

The company also laid off around 50 employees last year as part of an organisational restructuring.

However, the insolvency process does not mean the company has shut down. According to the report, the startup continues to operate as a going concern, with its business, customer services and commercial engagements continuing during the resolution process.

The order, passed on June 12, followed a petition by Axis Trustee Services, acting as debenture trustee for a group of investors. The tribunal appointed Manish Agarwal as the Interim Resolution Professional and imposed a moratorium on the company.

The development comes amid a broader shakeout in India’s AI startup ecosystem. According to Tracxn data cited by Financial Express, 18 Indian AI startups have shut down over the preceding 16 months, including Builder AI, NeuroPixel, Dotagent, Zeda.io, LEGOAI and MoneyyAI.

Investors are increasingly wary of startups building generic AI applications on top of third-party foundation models, particularly where there is limited proprietary technology, data or distribution.

AI application-layer startups Subtl.ai, CodeParrot and Astra shut down in 2025 amid funding constraints, weak differentiation and difficulties scaling. Subtl.ai failed to secure fresh capital, while Astra struggled with enterprise trust, lengthy sales cycles and internal disagreements.

In 2026, AI fashion startup Alle and computer-vision startup NeuroPixel.AI also shut down, highlighting continued challenges around product-market fit, sustainable business models and competition in application-layer AI.

Last month, AI startup Zams (previously Obviously AI) shut down after seven years in business, with founder Nirman Dave attributing the decision to the rapid commoditisation of AI applications as foundation models continue to absorb product capabilities.