Camera drone startup Lily Robotics filed for bankruptcy protection on Monday so it can conduct an orderly sale of its technology and pay refunds to customers.
The company netted 61,450 pre-orders for its drone cameras, generating about $38.4 million, according to court papers. But it announced last month that it had been unable to find enough financing to go into production.
As TechCrunch reports, Lily “was one of the first autonomous AI-assisted camera drones ever announced, and was supposed to revolutionize the personal camera drone industry. But in the time it took Lily to ship, others drones like Hover hit the market, and DJI developed autonomous flight modes for the Phantom and Inspire (and now Mavic), arguably the three best drones on the market.”
In a bankruptcy court filing, Chief Restructuring Officer Curtis Solsvig said Lily was hoping for a “competitive auction” after already receiving indications of interest for its primary asset — the intellectual property related to its flying drone with a waterproof camera — from potential buyers.
The company is seeking a speedy sale process to avoid “the potential loss of value to the [intellectual property] if it goes stale,” Solsvig added.
Lily, which was founded in 2013 by two University of California, Berkeley, students, attracted investors including venture capitalists Spark Capital and SV Angel and celebrities Steve Aoki and Joe Montana.
The first drone shipment date had been scheduled for February 2016, but court papers say the high demand forced Lily to postpone deliveries until later in 2016. By the end of the year, it said “the financial market had dried up, ” leaving the company to explore strategic alternatives such as a sale.
Lily said it has lined up a $3 million bankruptcy loan, subject to court approval, from Spark Capital.
“Access to post-petition financing is necessary to enhance the debtor’s liquidity, provide necessary capital during the pendency of this Chapter 11 case, and provide customers, employees, and other interested parties confidence that the debtor has sufficient resources available to organize a successful sale process and be able to refund customers in an orderly manner,” the company said.