SF Drone Company Collects $38M, Makes Zero Deliveries - NBC Bay Area
NBC Bay Area Responds Archive

NBC Bay Area Responds Archive

SF Drone Company Collects $38M, Makes Zero Deliveries

NBC BAY AREA RESPONDS

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    NEWSLETTERS

    A San Francisco startup takes thousands of pre-orders worth millions of dollars but never delivers the promised product. Consumers want refunds. And now, the district attorney is involved. Consumer investigator Chris Chmura reports. (Published Tuesday, April 18, 2017)

    An artful 2015 video touts the Lily camera, a clever twist on the drone. Lily stood out because it follows its subject and records life from above. Lily was advertised as autonomous and waterproof, too.

    Tech consultant Stuart Friedman saw Lily online and pulled out his credit card to land one six months ahead of everyone else.

    “It immediately hit me,” Friedman said. “They got me right where they wanted me: I have an immediate need for this.”

    The $1,000 flying marvel is the brainchild of two Berkeley alums. Their San Francisco company blanketed social media, offered pre-sales at a discount and collected more than $30 million. Lily co-founder Antoine Balaresque touted the financial feat in a 2016 interview with Tech Crunch.

    “Thirty million dollars?” asks the interviewer.

    “Thirty-four million dollars,” says Balaresque, correcting her. “It’s been great. We had traction around the world.”    

    Records show Lily ultimately raked in more than $38 million from 61,450 buyers in 80 countries.

    “I gave them $600,” Friedman says.

    • Customers: Submit Refund Info Here

    But Lily Robotics repeatedly pushed back its delivery date, leaving customers to wonder whether the drone-making start-up would ever get off the ground. It didn’t.

    “While, when I initially made my purchase I was fully aware that it would be six months until I received it, we’re sitting now at about two years since I purchased it [and I still don’t have it],” Friedman said.

    Faced with delays and excuses, thousands of fed-up Lily customers requested refunds and got them.

    One enlisted the Responds team at our NBC sister station in Washington, D.C.

     “I never suspected it was going to take 18 months,” said Lily customer Annie Rosello.

    But people like Friedman, as well as Kier in Milpitas and James in San Mateo and gobs of others who’ve sounded off on social media did not get refunds.

    “I was never responded to,” Friedman said.

    Friedman and others turned to us for help.

    We made multiple requests on their behalf. We asked where the $38 million went and whether customers would get their money back. But Lily’s responses equaled the number of drones it delivered: zero.

    The outlook was bad. Then, the situation got worse.

    The San Francisco district attorney sued Lily, accusing it of false advertising and misleading representations. The suit claims Lily’s promotional videos weren’t actually shot with a Lily.

    Some footage was allegedly shot by competitors’ drones and, according to the suit, Lily “failed to make any disclaimers regarding the true source of the video footage.”

    The district attorney accuses Lily of knowing what it was doing was wrong. The suit cites an internal email Balaresque sent. It reads: “I think we should be extremely careful if we decide to lie publicly.”

    A Lily lawyer declined to comment on the suit. Friedman is stunned by all this.

    “I guess, emotionally, it’s nice to see some legal action taken.”

    A source close to the company tells NBC Bay Area that Lily Robotics staff has now shrunk from 30 employees to just four: the two co-founders plus two newly hired experts whose sole task is to shut down the failed drone maker.

    Records show Lily has also filed for federal bankruptcy protection.

    Chapter 11 is often a bad omen for consumers, but this one might offer hope. We found the company has told the court it has $18.7 million remaining and 31,800 customers awaiting refunds. If the full amount would be devoted to refunds, that would average out to $588per person, about the same amount Friedman paid.

    Lily’s bankruptcy attorney told us “the company has requested court approvals to bring full refunds to its customers.”

    The court will sort out who Lily owes and how much. It’ll then decide if consumers like Friedman stand at the front of the line to be paid or the back.

    “The crazier part right now is I have no idea whether it’s a line, a crowd or a mad scramble,” he said.

    The San Francisco DA says he is moving forward with his civil suit against Lily Robotics, even though the company has filed for bankruptcy protection.

    To consumers who are due refunds, Lily says it knows who you are. But, its bankruptcy attorney told NBC Bay Area that if you’ve moved or changed your email address over the past two years, you’ll need to update your details to get your money back.

    Customers seeking refunds can update their information here.

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