Airware was a drone operating system startup founded in 2011 by Jonathan Downey.1245 The company raised $118 million from investors including Andreessen Horowitz, GV, and Kleiner Perkins.12456 Airware shut down on September 14, 2018, after running out of money.123456
Timeline
| Date | Event | Source |
|---|---|---|
| 2011 | Airware was founded by Jonathan Downey in Newport Beach, California. | 145 |
| 2014-01 | Airware relocated to San Francisco, California. | 45 |
| 2015 | Airware launched its Commercial Drone Fund for investing in the drone market. | 12 |
| 2016 | Airware acquired Redbird, a Paris-based drone analytics startup with 38 employees. | 12312 |
| 2017-06 | Yvonne Wassenaar replaced Jonathan Downey as CEO. | 3 |
| 2018-04-19 | Airware announced $8.5 million in funding, bringing total backing to $118 million. | 6 |
| 2018-09-10 | Airware opened a Tokyo headquarters with investment and partnership from Mitsubishi. | 1 |
| 2018-09-14 | Airware informed employees it would cease operations immediately. | 123456 |
| 2018-10-29 | Delair acquired Airware's Redbird analytics software and IP, plus 26 employees. | 3 |
| 2018-10-31 | Airware's hardware assets were auctioned by Heritage Global Partners. | 3 |
Money raised
Airware raised a total of $118 million in venture funding.123456 In April 2016, Airware raised a $30 million Series C round led by Next World Capital.914 The Series C round valued Airware at $184 million according to PitchBook.14 On April 19, 2018, Airware announced $8.5 million of funding, bringing its total backing to $118 million.6 Airware's investors included Andreessen Horowitz, Google's GV, Kleiner Perkins, Intel Capital, First Round Capital, Shasta, Felicis Ventures, and Y Combinator.123458 Airware sought a $15 million round before shutting down, according to a former employee.3
Investors named in the sources: Andreessen Horowitz1234512, Google's GV12345, Kleiner Perkins12345, Intel Capital35, First Round Capital38, Shasta3, Felicis Ventures38, Y Combinator3, Next World Capital912, Caterpillar34, Mitsubishi1.
What happened
Airware was founded in 2011 by Jonathan Downey, the son of two pilots.145 The company initially built an autopilot system for programming drones to follow certain routes to collect data.1 Airware later tried to build its own drones before pivoting to consulting clients on how to apply unmanned aerial vehicles.1 Airware made a cloud software system that helped enterprise customers use drones to collect and analyze aerial data.14 The company's customers included construction companies, mining operations, and insurance companies.14
Airware raised $118 million from top investors like Andreessen Horowitz, Google's GV, and Kleiner Perkins.12456 In 2015, Airware launched its own Commercial Drone Fund for investing in the market.12 In 2016, Airware acquired Redbird, a 38-person drone analytics startup based in Paris.12312 Airware tried to manufacture its own hardware, including two drones: a multi-rotor called AT-28 and a fixed-wing called Cygnet.1 The hardware projects were scuttled as hardware from DJI and Ebee caught up to needs.1
Airware's own hardware couldn't compete with drone giants like China's DJI.1245 The company pivoted to software, but the software that shipped with commercial drone hardware from other manufacturers was good enough to make Airware irrelevant.1 A downward spiral of layoffs began over the two years before the shutdown.1 Airware desperately sought cash for 18 months before running out of money.3 Strategic investments from Caterpillar and others kept Airware alive as it looked for a $15 million round.3
A late pivot from hardware to drone software sales through Caterpillar's dealers went sour.3 Airware lacked the features found in competitors and suffered from slow engineering cycles.3 Caterpillar told Airware it would not fund them any more and pulled its money, so Airware didn't make payroll.3 On September 14, 2018, Airware informed employees it would cease operations immediately.123456 The company at one point had as many as 140 employees, all of which were out of a job.145
Employees received one week's severance, COBRA insurance until November, and payouts for unused paid time off.1 Airware opened a Tokyo headquarters alongside an investment and partnership from Mitsubishi just four days before the shutdown.1 Airware confirmed the shutdown with a statement saying the market took longer to mature than expected and they ran out of financial runway.126 Airware put up a thank you note on its website informing clients that a representative would be in touch.12 French drone services company Delair acquired Airware's Redbird analytics software and IP, plus the 26 employees who ran it.3
The Redbird team brought along relationships with 30 drone dealers and 200 customers.3 The auction included dozens of DJI drones plus networking equipment and computers.3 Airware's investors were not likely to recoup much of their capital.3 Airware was not formally in bankruptcy or administration as of October 2018, according to Redbird CEO Emmanuel de Maistre.3 Airware's story serves as a cautionary tale of startup overspending in hopes of finding product-market fit.1
Where the founders are now
Jonathan Downey was replaced as CEO by Yvonne Wassenaar in June 2017.3 Yvonne Wassenaar had done a good job and been dedicated to fundraising to save the company since she joined, according to a source.3
Lessons, as others put them
"Airware was ahead of the game trying to build their software. So far ahead that the drone hardware on the market wasn’t sophisticated enough to actually produce the granularity of data they needed to test out their software/train their algorithms"an ex-employee1
"I think having $118M in the bank led Airware to charge ahead and sink tons of money into force-it-to-work methods rather than exercise a bit of patience and wait for the inevitable advance of hardware to catch up."an ex-employee1
"What happened in the company wasn’t so much that the management team didn’t manage it correctly. The sales team just couldn’t sell a product that didn’t work as easily as it needed to compared to other products in the market"a source3
"Ultimately it was a matter of bad timing, and they didn’t have the engineering to overcome bad timing"a source3
"The issue Airware had was a lack of funding. They ran out of runway"Redbird CEO Emmanuel de Maistre3
"Early is the same thing as being wrong"Jim Manzi, former CEO of Lotus Development4
Sources
- Drone startup Airware crashes, shuts down after burning $118M | TechCrunch, TechCrunch, 2018-09-14
- Drone Startup Airware Shuts Down Operations, Inside Unmanned Systems, 2018-09-18
- Failed drone startup Airware auctions assets, Delair buys teammates | Heritage Global Partners, Heritage Global Partners, 2018-10-29
- Drone company Airware Crashes, DRONELIFE, 2018-09-15
- Airware: What Happened to the Drone Startup (2026), Gappsy
- Airware shutdown: How to crash and burn a $118M drone startup - Geoawesome, Geoawesome, 2018-09-21
- Airware IPO Timeline and Financing Details - Forge, forgeglobal.com
- Drone startup Airware nabs $30M investment, constructiondive.com, Apr 1, 201
- StrictlyVC: September 22, 2016, StrictlyVC, LLC, 2016-10-09
- Drone Startups Pivoting to Enterprise Services, wsj.com, Oct 25, 20
How this case file was put together
Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.
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