The American Airlines investment in Vertical Aerospace marks the aviation industry's broad support of more than a dozen startups building air taxis. But be skeptical of the hype that small, electric-powered aircraft will be in the skies anytime soon.
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>>Vertical Aerospace, a maker of air taxis, said American Airlines made an undisclosed investment in the startup.
Based in Bristol, England, Vertical Aerospace plans to go public later this year in a possible $2.2 billion merger with a special purpose acquisition company (SPAC).
American will invest $25 million, alongside investments from Avolon, Honeywell, Microsoft, and Rolls-Royce, as Skift reported. It committed this week to buy an unpublicized number of the startup’s planned five-seat, electric-powered aircraft. So did Virgin Atlantic.
The startup faces many competitors that are developing similar air taxis, called electric-powered vertical takeoff and landing vehicles, or eVTOL.
Five other air taxi startups are also planning to go public, or already have gone public, via mergers with blank-check companies. Names include Joby Aviation, backed by JetBlue Tech Ventures and others; Eve Urban Air Mobility, supported by Brazil’s Embraer; Archer Aviation, whose investors include United Airlines; Lilium; and Blade.
One headwind for flying car development has been battery life. But Rolls-Royce on Wednesday said it plans to invest around $112.8 million (£80 million) in energy storage systems over the next decade to support zero-emissions flights.
That said, skepticism remains.
“While the flurry of SPAC-driven public market debuts in air mobility has created a peak of investor expectations, we believe mass eVTOL deployments in the early-to-mid 2020s are unlikely,” said Asad Hussain, an analyst at PitchBook Data, in a report this year.
CORRECTION: This article has been updated from having originally said American Airlines hadn’t disclosed its investment stake.
>>Vanpl, a service for booking rentals of recreational vehicles in South Korea, has raised an undisclosed seed round.
The company, based in Seoul, operates a peer-to-peer marketplace.
Skift Cheat Sheet:
We define a startup as a company formed to test and build a repeatable and scalable business model. Few companies meet that definition. The rare ones that do often attract venture capital. Their funding rounds come in waves.
Seed capital is money used to start a business, often led by angel investors and friends or family.
Series A financing is typically drawn from venture capitalists. The round aims to help a startup’s founders make sure that their product is something that customers truly want to buy.
Series B financing is mainly about venture capitalist firms helping a company grow faster. These fundraising rounds can assist in recruiting skilled workers and developing cost-effective marketing.
Series C financing is ordinarily about helping a company expand, such as through acquisitions. In addition to VCs, hedge funds, investment banks, and private equity firms often participate.
Series D, E and beyond These mainly mature businesses and the funding round may help a company prepare to go public or be acquired. A variety of types of private investors might participate.
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Photo Credit: An illustration of the air taxis being tested by Vertical Aerospace, a travel startup that American Airlines has backed. Vertical Aerospace