There’s suspicious silence about its failure — and already one lawsuit.
The rise and fall of Lily Robotics, a camera drone startup, follows a now-familiar script:
The company launched in mid-2015 with a promotional video of a breathtaking new gadget — in this case, a camera drone that automatically follows you around. It fetched millions of dollars worth of pre-orders, raised money from top-tier technology investors and hit unexpected snags leading to inevitable delays. Then, on Jan. 12, it announced it was shutting down before shipping a single device it sold.
“Over the past few months, we have tried to secure financing in order to unlock our manufacturing line and ship our first units — but have been unable to do this,” founders Antoine Balaresque and Henry Bradlow wrote in a blog post. “As a result, we are deeply saddened to say that we are planning to wind down the company and offer refunds to customers.”
Here’s what we know:
- The company claims it really will be refunding pre-orders. The money was kept in “cold storage,” according to a source close to the company. (In a Dec. 2015 blog post, the company similarly said, “We have no plans to use a single cent of that money until your Lily Camera goes into final production.”)
- Lily has been in the process of shutting down for several weeks. Employees were notified “several weeks ago,” according to a rep. This despite its last public tweets, posted on Dec. 12, 2016, still suggested drones would start shipping that month.
Meanwhile, those involved in running and funding the company have been unusually silent — suspiciously so — about the specific reasons for its unexpected collapse, which makes it seem like there could be more here than just a failed hardware startup.
And there is already one lawsuit, filed on Jan. 12 — the same day Lily announced it was shutting down — in the Superior Court of California in San Francisco, which makes some allegations public.
The suit, filed on behalf of the people of California, alleges the drone company intentionally misled customers with its promotional video that greatly exaggerated the drone’s smart, automated videography abilities — by shooting with a GoPro camera and a manually operated professional drone from rival DJI.
It also portrays a company that promised unreasonable ship-date estimates, violated rules around delays, and had no system in place to handle the international orders it was receiving.
Lily’s supposedly “false and misleading” video went viral, attracting more than $25 million in pre-order sales in just six weeks after it was released in May 2015, according to the lawsuit. (Lily initially sold for $499, but by 2016, the company was collecting $899 from customers hoping to receive one of its drones.) Lily never shipped a single drone it sold, yet continued to promise customers the flying robot they bought would soon come.
A spokesperson from the San Francisco District Attorney’s office told Recode the city has been investigating Lily for months, and multiple emails collected from the company are cited in its lawsuit.
These seem to expose the key problem: The jaw-dropping Lily footage purported in its promotional video wasn’t real.
In one of those emails, Lily CEO Balaresque wrote that the shots in the promotional video that are branded to come from a Lily drone would actually be captured with a “GoPro mounted to a Lily prototype.”
“However, we do not feel comfortable telling people that we shot