After burning through $118 million in financing, the drone company invested by Google GV announced its bankruptcy

Compiled and edited by Li Shan
Produced by QuantumBit | Public account QbitAI

Despite raising $118 million from top investors including Andreessen Horowitz, Google Ventures, and KPCB, drone operating system startup Airware abruptly informed employees today that it would cease operations.

Everything seemed to happen suddenly.

Airware previously tried to produce its own hardware in the hope of competing with giants like DJI, but that plan failed after the company burned through all its money, and all of its 140 employees will lose their jobs.

Someone in Airware's Slack alumni channel disclosed this specifically.

Airware has developed a cloud-based software system that helps companies in the construction, drilling and insurance industries use drone images to assess damage, thereby eliminating the need to use expensive helicopters or send out dangerous personnel to inspect damage.

Airware was founded in 2011 by Jonathan Downey, whose parents are both pilots. The company initially developed an autopilot system for programming drones to collect data along specific paths. It can help companies check for roof damage, understand how much raw materials are being excavated from a mine, or draw real-time updated maps for construction sites.

The company then tried to develop its own drones, and then transformed itself into providing consulting services to customers to help them use drones in the most efficient way.

△ Jonathan Downey

At its peak, Airware launched its own commercial drone fund in 2015 and acquired a 38-person drone analytics startup in 2016. The company wanted to prove that drones were more than just war machines, and it garnered a lot of attention.

But over time, the software that comes with commercial drone hardware companies has become good enough, causing Airware to be gradually marginalized. It has entered a downward channel in the past two years, and has also laid off employees, and finally officially closed down today.

But this was indeed unexpected because Airware's Tokyo headquarters had just opened four days ago and it had established an investment and partnership with Mitsubishi.

"Airware developed industry-leading software. But the lead was so great that the hardware on the market was not enough to really generate the data they needed to test the software and train the algorithms," said a former employee. "So, they spent a lot of money on custom hardware, including two indoor drones, an AT-28 multi-rotor drone and a Cygnet fixed-wing drone. But after investing a lot of development time and production resources, both projects were abandoned because DJI and Ebee's hardware gradually met the needs."

Airware also confirmed the company's closure: "History has taught us how difficult market transitions can be. We've seen this firsthand in the commercial drone market. We were a pioneer in this market and one of the first companies to see the power of drones in the commercial sector. Unfortunately, the market took longer to mature than we expected. We positioned ourselves for long-term success through several necessary transformations, but we ran out of financial resources. Therefore, it is with a heavy heart that we inform our team, customers, and partners that we will be closing our business."

“This is not the business outcome we have been striving for over the past few years, but it is an accomplishment for our company and for our leadership in advancing drone analytics to improve productivity, reduce risk, and keep our employees out of harm’s way.”

“As we close the chapter at Airware, we want to thank our partners and customers who believed in us and helped us along the way. While it’s hard to say goodbye to the team, we want to thank them for their contributions to Airware and the industry. We look forward to seeing how they use what they’ve learned at Airware to continue to drive innovation.”

Airware employees will receive a week of severance pay, COBRA coverage will be extended through November, and unused paid time off will be reimbursed. The startup appears unable to continue to secure the funding it needs or to secure an acquisition by a strategic partner such as Catepillar.

Airware's end is a warning to other startups that burn through money recklessly. If the company had saved some money and given customers more time to explore how to use drones, it might have survived longer. Sometimes, even the biggest investors can't avoid company management mistakes.

A former employee said that it was because of the $118 million in the bank account that Airware acted too aggressively and did not remain patient and wait for hardware progress. They also spent a lot of money to poach many top talents from Google, Audodesk, Space and NASA.

But now, all this has become a thing of the past.