German air taxi developer Volocopter closed a €200 million ($241 million) Series D fundraising round to certify its two-seat, piloted VoloCity aircraft and launch commercial air taxi services within the next two years.
The round, which brings Volocopter’s total funds raised to €322 million ($388 million), included all existing investors with the addition of funds managed by BlackRock, Avala Capital, Atlantia S.p.A, Continental AG, NTT, and Tokyo Century, among others.
Aside from EHang, which has been accused of misrepresenting its progress and reporting fraudulent sales, Volocopter has the most aggressive timeline for the launch of its air taxi service. Leading competitors Joby Aviation and Archer expect to begin operations in 2024, with Lilium targeting 2025 for its regional transit network in Florida — a timeline the company has sought to accelerate despite little evidence its design program is progressing according to, let alone ahead of, schedule.
Volocopter is also the only European eVTOL developer to have received design organization approval from the European Union Aviation Safety Agency (EASA), a key milestone on the path to certification, and one of the only developers that has made numerous public demonstration flights of a full-scale aircraft prototype.
Fresh off its fundraise, Volocopter expects its lead on certification, along with partnerships on vertiport infrastructure as well as air traffic management and other digital services, will enable the company to establish a foothold in key markets and the public consciousness before other aircraft are able to get to market — especially in Europe, where EASA will require all designs intended for commercial transportation of passengers to meet many of the same safety standards applied to airliners.
The VoloCity, a multicopter with 18 rotors, will be able to carry a pilot and one passenger a range of 21 miles (35 kilometers) at speeds up to 68 mph (110 km/hr). CEO Florian Reuter told reporters in February that the company’s model will be “profitable from day one” at a price point lower than comparable helicopter services.
Volocopter’s approach to aircraft design and the air taxi business model is radically different from the vastly more complicated — and capable — aircraft under development by most competitors. It’s also a departure from the market potential identified and championed by Uber Elevate, which relied on more complex aircraft capable of higher speeds to save significant time over ground transportation options and ridesharing to defray costs over more passengers.
Joby Aviation and Archer, both which recently raised more than $1 billion in mergers with special purpose acquisition companies (SPACs), are designing tiltrotor aircraft with far greater efficiency in cruise flight that more closely match Uber’s model. Their designs, along with Lilium’s vectored thrust approach, contain more moving parts and mechanical complexity than the VoloCity’s simplistic multicopter architecture.
“We believe, at the outset, we’re going to be the ones flying into the city for many years to come without direct competition, simply because the more advanced vehicles that we see out there are fulfilling different missions with different configurations,” Reuter said. “And the ones that do directly compare to our multicopter concept are either not fit for certification or are many years behind.”
Oliver Reinhardt, head of certification and quality at Volocopter, expressed great skepticism to reporters in February regarding the claimed progress and timelines targeted by some competitors, particularly given the complexity of their aircraft. He expects that not only will the VoloCity beat them to market by a wide margin but that urban air taxi missions won’t be the correct fit for these larger and likely louder aircraft; shorter hops in a city environment will likely mean less cruise flight relative to ascent and descent, which he believes will negate the energy efficiency benefits of designs aimed at longer trips.
“When you go into these cities, you have higher disk loading, you have significantly higher noise, you have significantly greater challenges in maneuvering between the buildings at higher speeds,” Reinhardt said. “That’s our mission. That’s what we are tailored for, and for this we have the optimum design which coincidentally is also the most straightforward design to get certified.”
Volocopter also believes that cities won’t accept the noise produced by larger aircraft with four to five seats.
A year ago, when the company closed its Series C round, Volocopter employed about 150; today, that head count has doubled to about 300 and the company’s website indicates more than 60 open positions. As the eVTOL developer prepares for initial operations across Europe, Singapore, and the United States — and pursues certification of its logistics-oriented VoloDrone as well as the VoloCity air taxi — the latest infusion of capital will likely be split across numerous lines of effort.
Industry experts have estimated the cost of certifying an eVTOL aircraft at anywhere between $300 million to $1 billion. Volocopter’s simpler design may make for a cheaper process, but it is likely the company will have to raise funds again before it commences operations in two or three years’ time — and almost certainly before operations are scaled to the point that profitability is achievable.
In December, Volocopter CFO Rene Griemens told eVTOL.com the company believes SPACs are “a great financing option for our industry,” given the large capital requirements involved in aerospace and the limitations on discussing projected revenues when pursuing a traditional initial public offering (IPO).
Sources familiar with ongoing industry conversations tell eVTOL.com the company is considering raising additional funds through a SPAC merger later this year — a possibility Volocopter may be hiring for.
Only time will tell what eVTOL designs are both certifiable and find a sizable market, and Volocopter may indeed find a unique application in congested inner cities, though Singapore, one of the company’s launch markets, may have less of a congestion problem and too useful a public transit system for commuter routes to take off.
If Volocopter is wrong about its competitors’ timeline to certification and ability to meet cities’ standards for noise pollution, the company may find itself facing far more capable aircraft in a competition to save people time by taking to the skies; similar to the helicopters they seek to replace or augment, multicopters are fundamentally limited on efficiency.
Of all the serious eVTOL designs pursuing certification, the VoloCity most represents the “minimum viable product” for an urban air taxi service. The aircraft’s simplicity could be seen a selling point — as Volocopter’s investors clearly believe — or it could result in a product rendered obsolete not long after it enters service.
“We’re being challenged when we talk to cities and investors . . . [in comparison with] vehicles and assumptions that haven’t even flown once, not to speak of manned or in a relevant context or with relevant certification,” Reuter said. “Many players in this industry don’t seem to be differentiating between what is real and what has yet to be proven real. That includes some companies that are extremely highly valued.”
Fortunately for Volocopter, Joby, Archer, and potentially other eVTOL developers, investors appear particularly willing to back numerous electric aircraft projects at the moment. Numerous players will have a chance to test their thesis, first with regulators and then with potential customers.