Drone company Lily Robotics Inc. has filed for Chapter 11 bankruptcy protection after it ceased trading in January and promised to refund pre-orders from more than 60,000 customers.

The company, founded in 2013, had promised via a crowdfunding campaign to deliver a self-flying camera drone that was in theory capable of following and recording users wherever they went, negating the need for self-sticks and GoPro cameras. But it never managed to so much as deliver a single drone despite raising $34.8 million in pre-sales for the product along with $15 million in venture capital.

Lily blamed its demise not on its own incompetence but an inability to raise more money to bring the product to market. Founders Antoine Balaresque and Henry Bradlow said in January that “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…. As a result, we are deeply saddened to say that we are planning to wind down the company and offer refunds to customers.”

In a bankruptcy court filing with the U.S. District Court in Delaware, Chief Restructuring Officer Curtis Solsvig stated that Lily was intending to undertake a “competitive auction” for its intellectual property from potential buyers, and that it was determined to refund customers. The filing added that it “will seek to refund all the segregated customer cash as soon as possible — with the Court’s approval” as they want “to ensure no customers are harmed in this process.”

According to Recode, some customers have already received refunds from the company, but others have not been so lucky. Court documents show that Lily transferred $16.5 million to payment provider Stripe in January to refund customer pre-orders and $3.9 million to Tilt, another payment provider the company used, for a total of $20.4 million, still significantly short of the $34.8 million raised in its crowdfunding campaign.

Refunding customers isn’t the only problem facing Lily. The company also was sued by the San Francisco district attorney’s office in January for allegedly faking product shots and misleading customers.

Photo: Lily Robotics