Lilium adds $35M from Baillie Gifford at a $1B+ valuation for its electric aircraft taxi service
While most air travel continues to be ground to a halt, a German startup working on what it hopes will be a major breakthrough in flying has raised more funds to continue building its service. Lilium, which is designing an all-electric vertical take-off and landing aircraft that it plans to build into a taxi-style fleet to ferry passengers within and between cities, has picked up an additional $35 million in funding.
The capital is an extension to a $240 million round Lilium announced just in March of this year, and notably brings in a new, high-profile investor to the startup's cap table: Baillie Gifford, the storied Scottish VC that has backed the likes of Tesla and SpaceX, Spotify and Airbnb, among others. (As we reported in March, the previous $240 million came from existing investors, which include the likes of Tencent, Atomico, Freigeist and LGT.)
Dr Remo Gerber, Lilium's chief commercial officer, confirmed in an interview that Lilium is in talks to add more to the round. That would be in line with what sources told us last year, when we reported that Lilium was looking to raise more like $400 million-plus.
So far, it brings the total raised by Lilium to more than $375 million, at a valuation that sources very close to the company confirm is now over $1 billion, making it one of the most highly capitalised, and most valuable, of the next-generation aviation hopefuls.
The extra funding is coming at a key time for Lilium, which is playing a long game but also facing a number of immediate-term challenges.
After a technical stumble earlier this year that saw an older prototype burst into flames while some maintenance was being carried out, leading to a pause while the company figured out what happened, Gerber says the company remains on track for its first commercial services. But those will not be for another five years, in 2025. (The plan is for these to be flown by humans, with autonomous flying vehicles" coming online about a decade later.)
In the meantime, many are bracing themselves for a big hit to the global economy as a result of the coronavirus pandemic, which is slowing down or halting altogether a number of industries, including three key ones that Lilium touches: aviation, manufacturing and travel.
Gerber said that this latest funding injection was both opportunistic and practical: he pointed out that it's great to have Baillie Gifford as an investor, but it also helps the company shore up its finances for whatever might come next in this period of uncertainty.
The two are not mutually exclusive," he said.
The company now employs 450 employees and has seen no layoffs at a time when millions have lost jobs globally, he added. With many on the design side working at home, Lilium also has large spaces, he said, well equipped for socially distanced manufacturing to handle the next phase of the company's development.
In the meantime, there remain a number of would-be competitors that are also chasing the same opportunity in flying vehicles, aimed at replacing cars in traffic-clogged cities as well as trains and other vehicles both in congested commuter corridors and routes that are uneconomical for other forms of transport.
They include another German startup, Volocopter, which is also designing a new kind of flying taxi-style vehicle and service, and also closed a $94 million round in February; as well as Kitty Hawk, eHang, Joby and Uber, in addition to Blade and Skyryse, air taxi services of sorts that offer more conventional helicopters and other vessels in limited launches for those willing to spend the money.
Kitty Hawk just last week ended its moonshot Flyer program to focus more resources and attention on its autonomous flying project, pointing to heightened activity in the space.
Safety issues and designing reliable and efficient vessels have been preoccupations not just for the companies building them, but for regulators. There are signs, however, that there may be more advances on that front too.
In the U.K. for example, the government last month announced a new initiative to back more companies building new and novel forms of air transport, part of its bid to support innovative industries and build more sustainable modes of transport for the future. Those are not green lights for services, of course, but are the first steps in that direction, indications that the government is keen to encourage and explore and support getting these ideas off the ground (so to speak).
Lilium sees opportunities both in the U.K. - buffered by Baillie Gifford's backing out of Edinburgh in Scotland - as well as across Europe and beyond.
We are delighted to support the remarkable team at Lilium in their ambition of developing a new mode of transport," said Michael Pye, investment manager at Baillie Gifford, in a statement. While still at an early stage, we believe this technology could have profound and far-reaching benefits in a low-carbon future and we are excited to watch Lilium's progress in the years ahead."