Joby Aviation announced on Feb. 24 it will become a public company via merger with special purpose acquisition company (SPAC) Reinvent Technology Partners in a deal that will net the company $1.6 billion in capital.
That cash will be put to good use with the ambitious goals Joby has laid out: certification by 2024, manufacturing 14,000 airframes in the next decade and launching operations across 20 cities.
eVTOL.com managing editor Brian Garrett-Glaser spoke briefly with three members of Joby Aviation’s leadership team moving forward: founder and CEO JoeBen Bevirt, chairman of the board Paul Sciarra, and Reinvent co-director Reid Hoffman, who will join the board of Joby once the deal closes late this year.
eVTOL.com: Let’s start with the deal itself. With so much discussion and activity around SPACs in the eVTOL sector, I have spoken to quite a few founders and investors about this and there are concerns raised about potential misaligned incentives moving from private to public markets when dealing with a long time horizon technology company such as Joby.
There’s also the question of — I know you’re confident you have raised enough capital and will certify the aircraft by 2024, but what if there are unexpected delays and you have to go back to the well to raise more, and how is that different as a public company versus a private company?
In short, why is this the correct funding vehicle for Joby?
Paul Sciarra: We talked to Reid and the broader Reinvent team and said, you know, we don’t know anything about what SPAC terms look like but we do know what private rounds look like, and in private rounds no one is rushing for the exit after the deal. Existing investors, management teams, new investors sort of lock arms to build value over the long term, and not percentages of the value but multiples of the value.
So we tried to capture that in the structure that I think you see in the deal terms. We felt it was not only the right partner but the right structure — and also the right time for us, when we had high confidence around the technical capabilities of the aircraft, confidence around the certification path that’s going to be required, and the things we needed to do on what timeframe to deliver on the milestone we plotted out.
But Reid has a really interesting perspective on why it’s particularly interesting for a company like Joby to be a public company a little bit earlier than we might have.
Reid Hoffman: Firstly, plus one to everything Paul said. As a function of the deal, the sponsor economics have different phases along five years and different price targets about growing into the future. So it isn’t a “this year” trade; it’s a “grow forward,” and we show that where our economic incentives are, not just with our words.
One of the reasons why I actually think being public is very helpful here is because public institutions have higher levels of accountability and scrutiny and participation. So, when you ask the question of how Joby gets to its mission — you need to have the buy-in of cities and communities, you need to have the buy-in of the FAA and regulation — the public nature of the company helps with all of that.
And then in terms of raising the money, we had a highly subscribed [private investment in public equity] with a bunch of word-class long-term investors. That obviously helps if there is a need to go back to the well; you have partners with you who are also long-term and invest in the future.
eVTOL.com: Where are you in the prototype’s flight test program today and when do you expect to prove out the aircraft’s 150-mile range?
Paul Sciarra: We’re sort of mid flight test program with the vehicle you saw flying today, about a few hundred flight tests in. We have done extended distance flights and then we’ve got an extrapolation to the 150 miles of range based on the power consumption, but we’ll be hitting those range milestones likely in the upcoming quarters.
eVTOL.com: Will the aircraft be certified to fly in instrument meteorological conditions (IMC)?
Paul Sciarra: Our first certification is going to be visual flight rules (VFR). Obviously, the vehicle will be built for instrument flight rules (IFR); we’re just going to catch that as a supplemental certification a little bit after the initial type certification.
eVTOL.com: And Joby is sticking to its plans to vertically integrate the service as well, rather than selling the aircraft, correct?
Paul Sciarra: We think the right way to take this to market is to not only be the manufacturer but also operate the vehicle, delivering the air transportation as a service directly, or at the very least indirectly, to customers on the other side. So we’ve got no plans for individual sale or sales to others and certainly none of the projections that we have here contemplate that.
JoeBen Bevirt: There is a massive amount of value that gets created by the recurring revenue stream that each of these aircraft generate.
eVTOL.com: How is Joby thinking about securing the pilots needed to operate the company’s networks in years to come?
Paul Sciarra: We started thinking about this a long time ago when we started the formal certification process with the FAA, and some of the approaches that we’re taking on the certification basis that we have take pilot recruitment into account. Because the aircraft is going to be certified under Part 23 rules, that means we’re going to be looking at the broader pool of fixed-wing pilots as opposed to the smaller pool of helicopter or the even smaller pool of powered lift pilots.
Likewise, internally we started to build the resources to begin to really tackle that problem. Bonny Simi came onboard a little bit ago and previously worked at JetBlue on this very problem. She was personally responsible for standing up their pilot training funnel, both on the recruitment and the training effort.
So, the combination of those two things — the [certification] approach and the kind of pilots that we’re going to be looking for, and the fact that we have some capability in-house to do that — I think is going to put us in good stead for being able to scale the service and the pilots as needed, at least in the first few years of launch.
eVTOL.com: For infrastructure projects that we see moving forward, do you expect there will be helipads or vertiports that only allow electric vehicles to take off and land at that location?
Paul Sciarra: We think it’s going to be tied to the noise profile of the vehicle for really obvious reasons — the frequency of takeoff and landing — and the noise that’s associated with a vehicle doing that is going to be super important.
If you take a look at the permitting for new helipads at current, most of the work that’s done is really about noise studies and understanding what that’s going to do to surrounding communities. So, whether explicitly or implicitly, I think there’s going to be a high emphasis on delivering a vehicle that is really quiet and we feel good about where we stand on that front. With another power train you might be able to deliver that kind of noise, but we’re not aware of it.
JoeBen Bevirt: And to add to that, there’s a bit of an assumption in the eVTOL industry, or about the industry, that just by making it electric you make it quiet. My realization in the early ’90s was that electric had the potential to be a transformational unlock to the acoustics. But it’s a necessary condition, not a sufficient condition, and you have to do really careful, rigorous work over a long period of time to get it right.
And it’s not just the absolute noise level, it’s also the character of the noise. We put a lot of work into making it sound more like the wind in the trees than the WOPWOP of a helicopter or the whine of a drone. That’s really about the holistic design of our aircraft and it took a lot of really rigorous engineering and testing to get it right.
eVTOL.com: I want to ask about the socioeconomic impact of aerial ridesharing service. In the event that Joby is a runaway success and we see somewhat widespread adoption of eVTOLs for travel and commute, we’re talking about more affluent people potentially opting out of the transportation infrastructure everyone else relies on and quite literally flying over it. How are you thinking about this and ensuring the overall impact of the service is positive for all?
JoeBen Bevirt: We’re really excited for what this will mean for taking traffic off of highways. Even if we only reach 10 or 20 percent of total trips traveled, that is a huge relief for overcrowded infrastructure, and we think will make travelling much better for everyone.
I also want to point out that from the very beginning Paul and I have been incredibly focused on delivering this at a price point which is accessible to everyone. That is central to every decision we made about design of the aircraft and design of the network such that we can progressively drive down the cost.
The goal is for this to be a less expensive mode of transport than driving over time. You see that today with commercial aviation where it’s not only our lowest-cost mode of transport, it’s our fastest and our safest. It has been proven out that aircraft, given their incredibly long life — even though they are expensive as a capital asset — the productivity that they provide, the utility that they provide, makes them really transformational.
eVTOL.com: And lastly, have you secured the ticker “JOBY” for the company’s listing on the NYSE?!
Joby spokesperson: We’re working on it!