Swoop Aero in the hands of administrators as turbulence strikes drone logistics group

Melbourne-based drone logistics operator Swoop Aero, a company that two years ago turned down a $100 million buyout from a US-based defence services contractor, has hit financial turbulence with the company this week placed into the hands of an administrator.

Simon Nelson, of BPS Reconstruction and Recovery, has been appointed administrator to Swoop Aero overseeing the company’s operations ahead of the first meeting of creditors scheduled for 24 October 2024.

The appointment follows a strong run of growth by the company in recent years as Swoop Aero proved its capabilities in last-mile logistics, particularly in delivering essential goods via drones to remote areas globally.

Swoop Aero, which was founded by former Air Force pilot Erick Peck and engineer Joshua Tepper in 2017, is said to have facilitated more than 30,000 operational flights globally since inception, delivering in excess of 1.5 million items, with a particular focus on getting medical supplies to remote or underserved areas.

BPS Reconstruction and Recovery says Nelson has been appointed administrator to both Swoop Aero and associate Kookaburra Aerospace, both of which continue to operate as normal under the administrator’s control.

“The administrator is currently working with key staff and management in order to assess the viability of the business to continue trading with an aim of achieving a sale as a going concern or alternatively a recapitalisation to obtain the best result possible for creditors and other stakeholders,” says the firm.

“The companies design, manufacture and operate a drone logistics network within Australia and internationally. This provides a unique opportunity for an interested party’s whether it be as an investor or purchaser of the business.”

Swoop Aero, which is backed by a raft of venture capitalists include Main Sequence Ventures, Giant Leap and US-based In-Q-Tel, has raised more than $26 million from investors since inception – including $16 million from a Series B in 2022.

Swoop Aero’s platform gained global traction during the pandemic with the company able to complement health supply chains and support rapid responses such as vaccine deliveries that were needed during this period.

Among the company’s milestone achievements have been the expansion of its Malawi and Democratic Republic of the Congo networks.

In addition to signing the world’s first competitive contract to deliver vaccines via drones, recognised by UNICEF and the Vanuatu Ministry of Health, Swoop Aero also announced a strategic partnership with Freight In Time to bolster operations in Ethiopia.

The company has teamed with AirAsia in Malaysia and DroneUp in North Carolina to boost their respective drone logistics programs, and has initiated groundbreaking medical drone logistics flights in the US alongside UPS and Texas-based Matador.

Peck has previously described drone logistics as being about more than simply product delivery.

“It’s about establishing a new infrastructure layer for society; an infrastructure layer which leverages the skies for movement of goods and delivery of services in a way that hasn’t been possible in the past,” he says.

“Swoop Aero makes it possible today, and our goal is to scale that infrastructure layer country by country, so our integrated drone logistics service reaches one billion people by 2030.”

Prior to its $16 million Series B capital raise in 2022, Peck told the Australian Financial Review that Swoop Aero had “walked away from a $100 million takeover offer from a US company servicing the defence sector” to pursue its growth strategy.

This is despite the takeover valuation by the unidentified US company being higher than the Series B capital raise implied.

While the company revealed at the time that all of its contracts were profitable, Swoop Aero also noted that it allocates significant capital into research and development.