Joby Aviation Considers Public Listing via SPAC Deal

Joby Aviation, having secured $590 million in funding led by Toyota and recently acquiring Uber’s flying taxi division, is reportedly exploring a public offering through a Special Purpose Acquisition Company (SPAC). This potential deal could value the electric aircraft manufacturer at approximately $5.7 billion.

SPAC Trend in Electric Aviation

This news follows a similar SPAC transaction involving Archer Aviation. Should reports in the Financial Times prove accurate, these two companies combined would represent a public market value nearing $10 billion.

The current market demonstrates significant enthusiasm for startups developing vehicles powered by alternatives to traditional fuels, and the SPAC route has become increasingly popular.

Electrification Across Transportation

Several electric vehicle companies, including Arrival, Canoo, ChargePoint, Fisker, Lordstown Motors, Proterra, and The Lion Electric Company, have either merged with SPACs or announced intentions to do so within the past year.

Currently, any company involved in the electrification of transportation appears poised to access public markets via SPACs – a method favored by companies seeking fundraising opportunities beyond traditional IPOs.

Reinvent Technology Partners Leading the Deal

The investment group potentially taking Joby public is spearheaded by tech entrepreneurs and investors Reid Hoffman, co-founder of LinkedIn, and Mark Pincus, founder of Zynga.

These two individuals established Reinvent Technology Partners, a SPAC, in 2020. The company successfully went public, raising $690 million specifically for acquisition purposes.

Benefits for Existing Investors

A successful transaction would benefit Joby’s current investors, which include Toyota, Baillie Gifford, Intel Capital, JetBlue Technology Ventures, and Uber, who previously invested $125 million in the company.

FAA Certification and Deal Contingencies

Joby’s prototype has completed over 600 test flights, but still awaits certification from the Federal Aviation Administration. The completion of the deal with Hoffman and Pincus’ SPAC is not guaranteed.

Additional capital investment into the SPAC is required for the transaction to proceed, and the absence of this funding could halt the process.

Growing Interest in Sustainable Transportation

Vehicles utilizing alternative power sources across all modes of transportation are currently attracting significant public investment. This trend is fueled by increasing pressure on institutional investors to prioritize environmental, sustainability, and governance (ESG) factors.

Government regulations promoting fleet decarbonization to mitigate global warming are also contributing to this momentum.

United Airlines' Investment in Archer Aviation

Scott Kirby, CEO of United Airlines, highlighted the environmental benefits as a key reason for the company’s $1 billion purchase order from Archer Aviation, which is also pursuing a public offering via a SPAC.

“By working with Archer, United is showing the aviation industry that now is the time to embrace cleaner, more efficient modes of transportation,” Kirby stated. He emphasized the need to support companies developing these technologies.

This investment also represents a potential new business line for United, potentially offering passenger transport to and from airports, as previously reported by TechCrunch.

United projects that utilizing Archer’s eVTOL aircraft could reduce CO2 emissions by as much as 50% per passenger on routes like Hollywood to Los Angeles International Airport.

Archer Aviation's Rapid Growth

The agreement to go public and the order from United Airlines occurred less than a year after Archer Aviation emerged from stealth mode. The company was co-founded in 2018 by Adam Goldstein and Brett Adcock, who previously sold their software company, Vettery, for over $100 million.

Marc Lore, who sold Jet.com to Walmart for $3.3 billion, serves as a primary backer of Archer Aviation. Lore previously held the position of Walmart’s e-commerce chief until January.

Other Players in the Electric Aviation Space

For investors seeking further opportunities in the electric aircraft sector, German tech developer Lilium and supersonic travel company Boom represent potential options.