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Bankrupt drone startup Lily is telling customers it has no time frame for refunding their preorders

Lily hopes to auction off its intellectual property this summer.


Failed drone startup Lily sent a very short email to its preorder customers last night about how they can get their money back, but there wasn’t any information on how long that would take.

The company filed for chapter 11 bankruptcy at the end of February in Delaware after being sued by the San Francisco District Attorney for misleading business practices.

The email looks to be a legal notice to customers with instructions on how to submit a request to get their money back.

Those who want a refund will now have to fill out a form, but there is no time frame for when payments will be returned.

Some customers report having already received refunds, but it’s unclear exactly how many have had their money returned. More than 61,000 people preordered a Lily drone between 2015 and 2016.

The company had amassed $34.8 million from those pre-sales, as well as $15 million in investment from high-profile Silicon Valley firms including Spark Capital, SV Angel, High Line Venture Partners, Sherpa Capital and Slow Ventures.

Lily aims to auction off its intellectual property in early June, according to its bankruptcy documents.

At various times during its rise and fall, Lily maintained that it was holding onto money in order to refund customers if necessary. Lily never shipped a single drone it sold.

The funds were kept in “cold storage,” a source close to the company told Recode. Similarly, in a December 2015 blog post, Lily claimed, “We have no plans to use a single cent of that money until your Lily Camera goes into final production.”

Customers hoping to receive a Lily drone put down a deposit of between $499 and $899, depending on how early their order was placed.

In its bankruptcy filing, the company claims it had begun processing refund requests “almost immediately after preorder sales started” in 2015.

While one customer emailed to let me know he received a refund from Lily, “as promised within five days,” dozens more have called or emailed since January complaining that they have not received their refund despite multiple attempts to contact the company.

By law, after shipping delays beyond 30 days, Lily is required to provide customers an option to be fully refunded or obtain consent for further delays. But Lily announced delay after delay without offering refunds. During this time, the company continued to collect preorder payments, according to the lawsuit from the district attorney.

Lily launched in 2015 with a dazzling promotional video that went viral, showcasing footage that was supposed to be from the Lily drone. But according to the lawsuit, the Lily drone wasn’t used to shoot the video.

Rather, the video was captured by a “GoPro mounted to a Lily prototype,” wrote Lily CEO Antoine Balaresque in an email obtained by the district attorney.

Recode reached out to Lily for comment, but did not immediately hear back.

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