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Drone Startup Airware Is Shutting Down After Raising $118 Million (techcrunch.com)

Posted by BeauHD on from the gone-with-the-wind dept.

Drone operating system startup Airware, which has appeared in a number of stories over the years, announced today that it will be shutting down immediately despite having raised $118 million from investors. " The startup ran out of money after trying to manufacture its own hardware that couldn't compete with drone giants like China's DJI," reports TechCrunch. "The company at one point had as many as 140 employees, all of which are now out of a job." From the report: Founded in 2011 by Jonathan Downey, the son of two pilots, Airware first built an autopilot system for programming drones to follow certain routes to collect data. It could help businesses check rooftops for damage, see how much of a raw material was coming out of a mine, or build constantly-updated maps of construction sites. Later it tried to build its own drones before pivoting to consult clients on how to most efficiently apply unmanned aerial vehicles. While flying high, Airware launched its own Commercial Drone Fund for investing in the market in 2015, and acquired 38-person drone analytics startup Redbird in 2016. In this pre-crypto, pre-AI boom, Airware scored a ton of hype from us and others as they tried to prove drones could be more than war machines. But over time, the software that shipped with commercial drone hardware from other manufacturers was good enough to make Airware irrelevant, and a downward spiral of layoffs began over the past two years, culminating in today's shutdown. Demonstrating how sudden the shut down is, Airware opened a Tokyo headquarters alongside an investment and partnership from Mitsubishi just four days ago. As for the employees, they "will get one week's severance, COBRA insurance until November, and payouts for unused paid time off," reports TechCrunch.

38 comments

  1. The work continues by Anonymous Coward · · Score: 0

    while DARPA takes over.

  2. Like many, they suffered from NIH syndrome by Anonymous Coward · · Score: 1

    Open-source was absolutely smashing these guys. They wasted inordinate amounts of time re-writing (poorly) the same features anyone could have for a download.

    They should have been more like other "drone" companies and just steal/illegally use the open-source code. DJI wouldn't exist without MultiWii.

  3. 140 employees by 110010001000 · · Score: 1

    140 employees to build, market, and sell a drone.

    1. Re:140 employees by ShanghaiBill · · Score: 4, Insightful

      140 employees to build, market, and sell a drone.

      Indeed. Their problem was that they couldn't decide what business they were in. Hardware? Software? Services? They tried to "do it all".

      Apple can afford to "do it all" and make both hardware and software, but Apple has 70,000 employees and $247B in the bank.

      If you have 140 employees you need to focus.

    2. Re:140 employees by Anonymous Coward · · Score: 0

      They had 118 million dollars, and 140 employees

      $118 million / 140 employees

      They had $842,857.14 for every single employee and yet they couldn't come up with a viable business plan?

      People have started successful business with much less than $800K, for crying out loud !

    3. Re:140 employees by JaredOfEuropa · · Score: 1

      That's the thing: they might have been successful if they had only gotten $800k. Or a bit more perhaps. Their problem wasn't that they didn't have enough money, they had too much of it, then they lost focus and overspent. Not the first startup to fall into this trap either.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    4. Re: 140 employees by dnaumov · · Score: 0

      Itâ(TM)s actually worth noting that for a consumer company itâ(TM)s size, Apple is as far from a âdo it allâ as it gets. To keep their focus they ruthlessly cut product lines where they think they canâ(TM)t add enough value to make it worthwhile, even though that single product, if born and grown outside Apple, couldâ(TM)ve been a reasonably succesfull company of itâ(TM)s own.

    5. Re: 140 employees by Anonymous Coward · · Score: 0

      What else would you expect from a company whose name is a synonym for VaporWare?

  4. Not every dream is realistic by Anonymous Coward · · Score: 0

    There is only so much economic need. The world only needs so many competing providers of any given thing.

    Economic competition means that most who try, must fail.

  5. "Drone Company Crashes to the Ground" headline by elrous0 · · Score: 1

    The other newspaper editors said I was crazy when I came up with that headline. WHO'S LAUGHING NOW?!?

    --
    SJW: Someone who has run out of real oppression, and has to fake it.
  6. Re: APK Hosts File Engine for MacOS!... apk by Anonymous Coward · · Score: 0

    Hey APK, your URL doesn't work.

  7. Re:And this... by 110010001000 · · Score: 0

    No infrastructure...to build drones? What is needed? A bridge? Plumbing? I assume you are talking about assembling consumer electronics. You don't need that in your country to make and sell crap. Just ask every tech company on the planet.

  8. Airware Sounds Way Too Close To Vaporware by Anonymous Coward · · Score: 0

    Just me?

  9. Fringe benefits by h33t+l4x0r · · Score: 1

    As for the employees, they "will get one week's severance, COBRA insurance until November, and payouts for unused paid time off,"

    Don't forget all those sweet-ass selfies.

    1. Re:Fringe benefits by Frosty+Piss · · Score: 1

      As for the employees, they "will get one week's severance, COBRA insurance until November, and payouts for unused paid time off,"

      Apperently they had quite a bit of money left if the payouts to 140 employees are this good after "running out of money".... Wonder what's really going on? Wonder where their Intellectual Property is going? Sounds shady.

      --
      If you want news from today, you have to come back tomorrow.
    2. Re:Fringe benefits by Anonymous Coward · · Score: 0

      You must be fortunate and well paid if you think these benefits are good.

      COBRA benefits run out in November. Two or three months to find new, affordable insurance sucks. Only 1 week severance.

      I'm sure the people at the top are well taken care of but most are in a bad position.

    3. Re:Fringe benefits by quarrel · · Score: 1

      No, they will owe that money to the employees. In most jurisdictions, if a company can't pay their debts as and when they fall due, then they are out of money.

      In some places, the Director's are personally liable if they let a company continue to trade past that point (which is bad, because a company is explicitly about limiting the liability).

    4. Re: Fringe benefits by Anonymous Coward · · Score: 0

      After cobra runs out, it cost $1000 a month to continue it. LOL. What a fucking joke.

    5. Re:Fringe benefits by Anonymous Coward · · Score: 0

      In some places, the Director's are personally liable if they let a company continue to trade past that point (which is bad, because a company is explicitly about limiting the liability).

      Companies limit liability for investors. People running the company are always liable for the decisions they make. Having it any wither way would be insane.

  10. Re: And this... by Anonymous Coward · · Score: 0

    Where are you? Singapore or Moscow?

    Piss off.

  11. Re: APK Hosts File Engine for MacOS!... apk by Anonymous Coward · · Score: 0

    I never use hostfile engine or blocker, timecube analysis indicates bad, possibly dinosaur rebellion!!

  12. Pay by Anonymous Coward · · Score: 0

    I wonder how much money the founders were paid during the development. Also tons of people have designed and built drones using far less money than $118 million dollars - sounds like there was tons of waste too.

    1. Re: Pay by Anonymous Coward · · Score: 0

      It sounds like they blew too much money on try to produce them on their own assembly line.

      Probably should have outsourced that.

  13. Re:And this... by mikael · · Score: 3, Interesting

    You'll need manufacturing to make the plastic/metal propellers, depending on size, purchase electric motors, build the frame/chassis with all the different options; landing legs, camera mounts, safety cages for propellers. All of those add weight, so that affects the size of the motors, propellers and battery. Then you are onto the control system to maintain stability, speed, monitor battery levels, motor speeds, stream audio and video by radio, handle remote control commands, do advanced features like follow targets and head-for-home if battery power gets too low.

    The problem is that there are too many choices, and they would have had to pick one niche market; the smallest lightest drone, the fastest drone, the drone with the longest in-the-air time. Each would have required R&D to find the best combination of materials.

    --
    Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
  14. Prohibitive regulations in the US and EU by Max_W · · Score: 1

    It is not possible in principle to compete with Chinese companies because of the prohibitive regulations of the civil UAV market in the US and especially in the EU.

    The civil UAV industry is like the space industry was in the second half of the 20th century. This is where innovations happen. This industry could generate millions of new hi-tech jobs. But instead we have got populist law-makers who act speaking figuratively like Chihuahuas attacking anything new and looking back for approval.

    1. Re: Prohibitive regulations in the US and EU by Anonymous Coward · · Score: 0

      Blah blah blah...:

    2. Re:Prohibitive regulations in the US and EU by Anonymous Coward · · Score: 0

      except of course the Chinese made DJI's are all compliant with US and EU regulations and are the most popular drones in both those regions, So tell me again how the fuck this is what is preventing them from competing as the Chinese have to meet the same regulations?

  15. Founded in 2011 by Anonymous Coward · · Score: 0

    Is it still fair to call them a startup?

  16. Commoditization by Anonymous Coward · · Score: 0

    Commoditization in rapidly innovating and developing industries happens much faster than in more established industries, as the customers gravitate towards the cheapest way of solving their problems. They couldn't create the Android for Drones, but maybe they should have tried their luck on traffic control over a smart city, although that is still in the future and much bigger companies and universities are already working on it.

  17. Re: And this... by Anonymous Coward · · Score: 0

    How is that something that can't be done here, again?

  18. Another failed pipe dream by Anonymous Coward · · Score: 0

    Don't know if I feel more for the idiots who invested in such a company, or the employee's who just lost their jobs. Wonder what sort of parachute the executives got because they obviously raised quite a bit of money.

  19. Re: Ray Morris is a lying nazi faggot. by Anonymous Coward · · Score: 0

    Tolerant Progressive!

  20. Re: Ray Morris is a lying nazi faggot. by Anonymous Coward · · Score: 0

    Unuseful idiot.

    Yea let's make a post that's racist, then tell to it labeling the other side.

    Fuck off troll.

  21. Re: And this... by astrofurter · · Score: 1

    Nonsense!

    Thanks to OBAMA, America is the greatest industrial power in the world. Our bridges and roads are in perfect condition. Our industrial base isn't in collapse - it's the envy of the world! We produce far far more than China. People around the world see "made in USA" on everything they use. Consequently, American workers are all super prosperous. No one is living paycheck to paycheck.

    But TRUMP is trying to ruin it all!! 'Cuz Russia! Eeek, scary bad orange man!

    I know because NPR told me so...