Volocopter Raises $241M for Flying Taxi Service

The Rise of Flying Taxis: Volocopter Secures Significant Funding

Amidst reduced passenger numbers across traditional transportation methods like airplanes, trains, and buses following the COVID-19 pandemic, a startup aiming to revolutionize personal transport – through the development of electric flying taxis – has successfully secured substantial investment.

Volocopter's Series D Funding

Volocopter, a company based in Bruchsal, Germany, specializing in the construction and testing of electric VTOL (vertical take-off and landing) aircraft, has raised €200 million, equivalent to approximately $241 million, in a Series D funding round.

The company envisions a future where its aircraft operate as a taxi fleet within urban environments. According to CEO Florian Reuter, the commencement of commercial services for its two developed vehicle models is anticipated within the next two years.

“We anticipate certification of our VoloCity aircraft in roughly two years, followed immediately by the launch of commercial air taxi services,” Reuter stated. “Paris and Singapore are currently leading contenders to be the first cities to implement this service, with Paris aiming to have electric air taxis operational for the 2024 Olympic Games. We foresee initial commercial flights with our VoloDrone even sooner than with the VoloCity.”

Demonstration Flights and Expansion Plans

Volocopter has already showcased its aircraft through demonstration flights in various global cities, including Helsinki, Stuttgart, Dubai, and over Singapore’s Marina Bay. The company also intends to extend its services to the United States.

This funding timeline aligns with the company’s previous projections. In 2019, during its Series C funding round (eventually closing at €87 million, or around $94 million), Volocopter predicted being operational within three years.

A Diverse Investor Portfolio

This latest, and oversubscribed, Series D round includes investments from a diverse group of financial and strategic partners. These include funds managed by BlackRock, global infrastructure firm Atlantia SpA., Avala Capital, automotive component manufacturer Continental AG, NTT (through its venture capital arm), Tokyo Century, and several family offices.

Furthermore, Volocopter confirmed that all existing investors – such as Geely, Daimler, DB Schenker, Intel Capital, btov Partners, Team Europe, and Klocke Holding – also participated in this funding round.

Building a Comprehensive Ecosystem

The extensive list of investors reflects the complexity of Volocopter’s undertaking and the necessity of a broad network of collaborators, explained Rene Griemens, the company’s CFO.

“Launching urban air mobility requires a complete ecosystem, which we are currently developing. Many of our strategic partners will provide support across various aspects, including supply chain management, component scaling, market entry, and operational improvements,” Griemens said. “Their investment demonstrates their confidence in Volocopter’s leadership in building the entire UAM ecosystem, providing reassurance to financial investors.”

He emphasized that many of these partnerships are highly collaborative. “For instance, DB Schenker is collaborating with us to deploy advanced, heavy-lift electric logistics drones globally.”

Financial Standing and Future Valuation

To date, Volocopter has raised nearly $390 million in funding. While an updated valuation is pending, PitchBook currently estimates the company’s value at $624 million.

Innovative Air Mobility: Volocopter's Decade-Long Pursuit

Established in 2011, Volocopter has dedicated the past ten years to developing a unique concept – characterized by its notably broad circular design replacing the traditional helicopter rotor. This endeavor represents a quintessential example of a bold, ambitious undertaking.

Currently, the company has not yet achieved profitability, and the product it is developing – pioneering flight into previously unexplored airspace – remains largely unproven.

Volocopter is not alone in pursuing “flying taxi” solutions; other substantially funded companies such as Lilium, Joby Aviation, Kitty Hawk, and eHang are also actively involved.

However, these competitors have encountered various obstacles, including investor litigation, bankruptcies, accidents, discontinued projects, and divestitures. Notably, Joby Aviation acquired Elevate last year following Uber’s decision to move away from expensive, long-term projects.

Crucially, none of these companies are currently operating commercial flights. Investment in Volocopter, like its peers, is a long-term commitment based on faith in the concept and the team’s ability to deliver.

The company asserts that technological barriers are no longer a significant impediment, and regulatory bodies appear increasingly receptive. The pandemic has prompted regulators to explore innovative solutions to existing challenges, aiming to enhance efficiency and adapt to evolving public health demands.

The potential of Vertical Take-Off and Landing (VTOL) aircraft lies in their ability to alleviate urban traffic congestion and offer a more environmentally friendly alternative to conventional transportation.

Conversely, ensuring the safety of these novel devices, as well as the traffic management systems they would integrate into, presents a considerable challenge. The aspiration for fully autonomous operation further complicates matters.

Interestingly, regulatory bodies in certain markets, previously hesitant towards new concepts, now demonstrate greater openness, particularly in light of the pandemic. This trend is mirrored in other sectors, such as the U.K. electric scooter market, which experienced increased activity after regulators granted provisional approval, citing the need for individualized transport options.

Volocopter’s business model centers on transporting individuals or small groups, potentially making it particularly appealing.

“Technological hurdles are largely resolved at this point,” stated Reuter. “The focus now is on implementation. EASA has established the criteria for certifying electric air taxis to the highest aviation safety standards. We possess the leading technology to meet these stringent standards and are dedicated to completing the remaining certification steps.”

He indicated that the primary remaining challenges are typical of a rapidly growing, highly technical startup: “Currently, our biggest challenge is attracting and retaining skilled personnel,” he explained. “We are actively seeking top talent globally and expanding our team to accelerate both technical and market development. We are working at full capacity to prepare all necessary elements – digital infrastructure, landing sites, city approvals – in key launch markets like Paris, Singapore, China, and Japan.

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