The dream is over for drone delivery startup Swoop Aero, with creditors voting on Tuesday to place the venture capital-backed business in liquidation.
Swoop raised more than $26 million in VC funding, with CSIRO-backed Main Sequence, impact fund Giant Leap, US investor In-Q-Tel, the defence tech investment arm of the CIA, Artesian, Folklore Ventures, Right Click Capital and Blackbird among its investors, as well as Startmate.
Cofounder and CEO Eric Peck placed Swoop Aero Pty Ltd and Kookaburra Aerospace Pty Ltd in voluntary administration on October 14, hoping a restructure would deliver a path forward, but the second creditors’ meeting this week brought things to an end, just two years after a reported $100 million takeover offer.
“As a founder of the business, my focus now is on bringing the right financial partners and key stakeholders to the table to enable a successful restructure,” Peck said at the time.
“I’m confident that with the right support, Swoop Aero will continue to lead the way in drone logistics, delivering innovative solutions and transforming healthcare and essential goods delivery across the globe.”
Eric Peck with a Kite Drone
Administrators, now liquidators BPS Reconstruction and Recovery did not respond to Startup Daily’s request for comment and similar requests to investors were either declined or did not elicit a response.
The creditor’s report prepared by administrators revealed that the business lost $9.3 million in FY2023, on the back of $6.6 million in revenue.
It said the directors blamed the failure on a lack of additional capital to complete and commercialise the final product
The administrator said “poor strategic management” and a sluggish economy were partly to blame, but the business also suffered from under-capitalisation and “inadequate cash flow or high cash use” alongside “significant expenditure” on research and development.
Peck had previously claimed to the media that was under pressure from a key investor to cut costs and was unable to secure “just a few hundred thousand dollars” to complete production of its Kite drones, first announced in 2021.
He said they were “stuck in a loop where we needed to ramp up manufacturing to ramp up revenue, but we needed capital”.
The Kite was developed by Australian-based engineers to travel at up to 200km/h across a range of more than 180km on a single battery charge, with a 5kg payload. It featured at the recent Landf Forces defence expo in Melbourne.
The company’s initial fleet of “Kookaburra” drones was recently retired from service.
Peck, a former RAAF pilot, cofounded Swoop in 2017 with engineer Joshua Tepper. Initially the startup focused on delivering urgent supplies, especially medicines and vaccines, to remote areas, partnering with governments and healthcare organisations such as UNICEF and the Bill and Melinda Gates Foundation, making more than 1.6 million deliveries across the Pacific and Europe, Africa, New Zealand, and Australia.
A 2021 trial with Terry White Chemmart delivered medicines within a 130km range of Goondiwindi on the Queensland-NSW border.
That year Swoop raised $16 million in a Series B, with Artesian and Folklore backing the company across three rounds.
Last year Peck told Forbes that Swoop was raising $60m raise in the US, and had already secured around half that figure, amid plans for revenues of $100m by 2025, but there was no subsequent funding announcement.
His cofounder, Joshua Tepper, resigned last Christmas, with three directors representing Main Sequence, Folklore and Right Click also departing around the same time.
The question now for the liquidators is how much the IP invested in developing the Kite drone is worth and whether it will salvage any investor funding as a result.
The creditor’s report said there had been interest in acquiring the assets and Swoop, but it may involve a Deed of Company Arrangement, which the administrator rejected, saying they “should make a purchase proposal”.
A Swoop Kite drone above Melbourne
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