Eagerly anticipated “selfie drone” the Lily Camera, which promised to be able to follow owners around and automatically photograph them, has been cancelled by its designers.

The drone secured at least $34m of pre-orders since going on sale on the manufacturer’s website in June, but the costs of development continually outpaced the speed with which Lily could raise funds.

Lily’s founders, Antoine Balaresque and Henry Bradlow, informed customers that due to failures to secure financing in order to manufacture and ship products, they would be forced to shut down the company and offer refunds to customers. They said: “We have been delighted by the steady advancements in the quality of our product and have received great feedback from our Beta program. At the same time, we have been racing against a clock of ever-diminishing funds.”

When the drone was first available for pre-order, it promised class-leading capability for half the final expected cost. Buyers could pay $499 to pre-order the drone, which was to have a 1080p video camera and a 12 megapixel still camera strapped to a drone with a 20-minute battery life. The downside was that the pre-order amount was charged immediately, which the company said “helps us reduce risk”.

As well as the basic drone functionality, the Lily distinguished itself with selfie features: owners would have worn a tracking device, which would let the drone follow them around, filming and snapping shots all the while.

But none of that came to pass. Balaresque and Bradlow wrote: “We are very sorry and disappointed that we will not be able to deliver your flying camera. We hope our contribution will help pave the way for the exciting future of our industry.”

The death of the Lily underscores the risk for consumers in funding pre-release technology. While the Lily did not directly turn to crowdfunding, steering clear of platforms such as Kickstarter in order to raise funds directly through pre-orders, the outcome has been reminiscent of prominent Kickstarter failures such as the Zano drone.

Launched in 2015, Zano was a British “nano drone” that raised £2.3m on Kickstarter, then declared bankruptcy before the year was out. Like the Lily, it was sold on its selfie ability: “Taking your selfies to new heights” was one tagline.

Unlike the Lily, however, a few Zanos made it out to purchasers – 600 of the 15,000 that were pre-sold – but users reported widespread technical errors.