Volocopter, the startup out of southern Germany (Bruchsal) that has been developing electric VTOL (vertical takeoff and landing) aircraft and a business model for operating them in taxi-style fleets in urban areas, has picked up another big round of funding as it inches closer to its first commercial launches.
It raised $170 million, funding that it said it will be using to kick off its first air taxi services, which it noted in an announcement would be “in cities like Singapore, Rome, and Paris.”
A spokesperson said the commercial launch will depend on the type of certification it gets and when. If fully achieved in the latter half of 2023, the commercial launch in the first cities is expected to be 2024. Florian Reuter, CEO of Volocopter, told us in March 2021 that the services were two years out (so, 2023).
“Our target is to start commercial flights by Paris Olympics 2024,” said a spokesperson for the company.
The money is part of a Series E, and Volocopter describes it at a first closing made at a pre-money valuation of $1.7 billion, which works out to a post-money valuation of $1.87 billion. Volocoper has confirmed to me that the full target for the Series E is €300 million to €500 million ($330 million to $550 million). “We have other investors in the due diligence phase, but we do not know the timing of the next signing round nor the full amount yet,” a spokesperson said.
This first tranche is being led by WP Investment, a new backer of the company from South Korea, with strategic investor Honeywell (also a new investor) and previous backers Atlantia, Whysol, btov Partners, and other unnamed existing investors also participating. It has raised $579 million to date, and other investors include Geely, Mercedes-Benz Group, Intel Capital and BlackRock.
In 2017, Volocopter made a big mark in the autonomous vehicle space when — backed by giants like Intel — it ran its first autonomous flying car test in Dubai. (Intel also imported and showed off the Volopter’s self-flying capabilities at an over-the-top event of its own.)
Notably, the announcement of the funding today doesn’t have a single mention of autonomy or self-driving capabilities, underscoring some more realistic framing as these services get closer to being rolled out.
Volocopter confirmed to me that first commercial services will be piloted. “The VoloCity will have the technical capability to fly crewed, remotely piloted, and autonomous at the time of commercial launch,” a spokesperson said. “However, we feel that public acceptance will be easier with a piloted flight. Once urban air mobility [UAM] adoption increases and cities have regulations allowing non-crewed forms of flight, we will gradually move towards remotely or autonomous flights.” That will also depend on individual city regulations.
“This funding round is a testament to Volocopter’s leading position in what is a highly attractive emerging market. We continue to make significant technical and commercial progress as we work toward bringing urban air mobility to life at scale in cities worldwide,” Reuter said in a statement.
Currently, Volocopter highlights three craft that will appear in its taxi fleets: VoloCity, VoloConnect and VoloDrone. It said that it is the “first and only” electric vertical takeoff and landing (eVTOL) company to receive Design Organisation Approval from the European Union Aviation Safety Agency. That means, if it plays its cards right, it could have a clear shot at the market either as a standalone branded commercial provider or as a partner to other urban transportation companies before competitors move in. Others hoping to make a mark in this space include Lilium, Kitty Hawk and Joby Aviation.
This Series E is an all-equity round, but Volocopter has also been raising a lot of debt for the building of that bigger fleet. Earlier this year it inked a $1 billion deal “in principle” with Aviation Capital Group to finance the sale and leasing operation of Volocopter aircraft (that will mean that it could borrow up to $1 billion in debt when the time comes). This will kick in only once Volocopter has full aircraft certification.
It has so far completed some 1,000 public and private test flights.
The company also noted in the announcement that it plans to use the funding to get to launch, but also to eventually go public.
“Volocopter has spectacular investors from around the globe, which puts us in an excellent position to focus on our first-to-certification and first-to-market strategies before we embark on the path to public listing,” Christian Bauer, CCO of Volocopter, said in a statement.
That fist-mover advantage and the work that it’s been doing for the last 10 years developing its air vehicles seem to be the two factors that are lending it a lot of credibility right now with investors, even though it has yet to prove a market for the product.
“We are confident that Volocopter will be among the first to bring UAM to cities globally, since seeing its aircraft fly in Seoul last year. As a leader in ESG investment, we are excited to empower city sustainability through Volocopter,” Lei Wang, chairman of WP Investment, said in a statement. The firm’s co-chairman, Tiffany Park, added that South Korea will be a part of the commercial launch as well.