AI startup Unbabel declared insolvent after receiving €13.3 million in PRR funding

Portuguese artificial intelligence company Unbabel has been declared insolvent after receiving €13.3 million in funding through Portugal’s Recovery and Resilience Plan (PRR).

According to national tabloid newspaper Correio da Manhã, the Lisbon-based startup, once one of Portugal’s best-known AI companies and a member of the Unicorn Factory Lisboa ecosystem, filed for insolvency in February. The case is now before the Commercial Court and involves around 30 creditors, including public entities.

According to information published on the Mais Transparência portal, Unbabel was approved for a total of €14.83 million in PRR funding linked to an artificial intelligence development project. Of that amount, approximately €13.3 million had already been paid, representing nearly 90% of the approved funding.

Among the creditors listed in the insolvency proceedings are the IAPMEI – Agency for Competitiveness and Innovation – and the Social Security Institute.

The presence of IAPMEI among the creditors could indicate that questions remain regarding the fulfilment of objectives and milestones associated with the publicly funded project, CM reports. Under Portuguese and European funding rules, companies may be required to return support received if contractual obligations are not met.

It remains unclear whether any repayment will ultimately be required, with that determination expected to depend on ongoing legal and administrative proceedings.

A creditors’ meeting is scheduled for July 2, when the next steps in the insolvency process are expected to be discussed.

Signs of financial difficulties had already emerged at the end of 2025, when an investor filed a €12.75 million legal action seeking to overturn the sale of Unbabel’s assets to US-based translation company TransPerfect.

Months later, the company filed for insolvency, ending a difficult period for what had once been regarded as one of Portugal’s most promising technology startups.

Founded in 2013, Unbabel developed artificial intelligence and language technologies aimed at helping businesses translate and manage multilingual customer communications. The company attracted international investment and became one of the country’s most closely watched technology firms during Portugal‘s startup boom.

Portugal Resident

The Latest News from Portugal in english. Explore Portugal News, Algarve News, Portugal Events, Community, Business, Lifestyle from Portugal Resident.