In November 2018 the company received US$170 million in funding from its Chinese backers to construct a manufacturing facility and one prototype for flight, with production to follow in 2021.

[2] A second prototype, which was more representative of the definitive design, featured several alterations; these included the adoption of a new composite wing, which connected with a set of cabane struts to the fuselage only, and was a larger aircraft overall.

[7][3][8] In November 1989, the company behind the Seastar, Claudius Dornier Aircraft, filed for bankruptcy, amid claims that the German government had failed to support the project.

However, in July 1995, a company spokesperson stated that Dornier Seastar's Malaysian subsidiary would be shelved until further notice, due a lack of capital investment; it has been allegedly that investors were concerned about the technical and financial viability of the project, such as the acquisition of internationally recognised production certification in Malaysia.

[7] Following the collapse of the Malaysian joint venture, Dornier Seastar promptly set about attracting new investors to finance the program into the manufacturing phase.

While the company focused its search on the Asian market, representatives stated that they were considering relocating production of the type to another country; Dornier Seastar also dismissed claims that a further $100 million were required to complete development of the aircraft's design.

[10] In early 1998, Dornier Seastar proposed the formation of a partnership with Hindustan Aeronautics (HAL), with the goal of producing the type as a joint venture.

[8] In February 2004, the company stated that, in addition to seeking investment, it had been evaluating potential manufacturing sites in Europe and Asia prior to initiating a planned development phase later that year.

[13] In March 2009, the firm stated that it was pushing back its planned launch to the third quarter of that year, attributing this to the effects of the Great Recession, but remained optimistic about market demand for the type; it was also said that Dornier required only an additional $65 million, rather than the $150 million figure given in an earlier business plan, to establish full production status and to begin manufacturing work.

[15] The site was picked due to the strength of the local supply chain and presence of skilled aerospace workers, as well as its proximity to Lake Champlain for flight operations.

[23] The Seastar's fuselage is composed of a fiberglass composite material, which is corrosion-proof as well as being less prone to leaks in comparison to rivetted metal hull counterparts.

[4][23] Unlike typical floatplanes, which are often conversions of land-based aircraft, the Seastar has a low vertical center of gravity, achieved in part by carrying all of its fuel within its sponsons instead of the wings.

[23] The sponsons, which provide stability while submerged on the water, are shaped to break surface tension and to generate considerable lift during the acceleration performed during takeoff; they also accommodate the main landing gear.