Air Taxi Company Gets $50M New Funding; Testing Continues

Vertical Aerospace, an eVTOL (electric vertical takeoff and landing) vehicle maker, is getting $50 million in new funding for the continued development and certification of its VX4 flying vehicle.

The new financing comes from Mudrick Capital and includes $25 million in upfront funding and an additional $25 million that would be reduced by any financing from third parties. 

The term sheet includes an option for Fitzpatrick to invest an additional $25 million.

“It is great to be able to announce this new funding today,” said Stephen Fitzpatrick, majority shareholder and board member. “We have been working hard to find a way to support the company in the short term, but also set us up for long term success. The additional equity and stronger balance sheet will enable us to fund the next phase of our development program and deliver on our mission to bring the amazing electric aircraft to the skies.”  

Vertical Aerospace recently conducted piloted take-off and landing for the first time as Phase 2 of its flight test program has started.

The full-scale VX4 prototype flight tests were conducted at the company’s flight test center at Cotswolds Airport in the U.K.

Tests now move on to low-speed maneuvers with lift generated by the propellers.

All the other air taxi services in development are working through similar regulatory approval processes.

Related:Air Taxi Company Starts Phase 2 of Piloted Flight Tests

This was the second of four test phases required by the U.K. Civil Aviation Authority’s (CAA) to receive certification. The third phase involves taking off and landing like a conventional aircraft with lift generated by the wing.

Mudrick Capital Management, which invested $200 million in the form of convertible senior secured notes in Vertical in 2021, earlier had proposed an equity offering to fund the company into 2026, according to a Securities and Exchange Commission (SEC) filing.

It was unclear at the time how Vertical would respond to the offer, since it could have meant relinquishing control of the company.

As of September, Vertical had cash and cash equivalents of $57 million, according to the company.

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Vertical said the company has the capital needed for the business to deliver its operational goals over the next 12 months.

This is the latest in the recent financial situation relating to the business of flying vehicles.

German eVTOL jet maker Lilium recently announced it was facing insolvency after the company was denied a $54 million loan guarantee it was seeking from the government of Bavaria.

Related:Flying Taxi Startup Faces Insolvency

On the other side, flying taxi company Joby Aviation announced a public offering of common stock expecting to raise $202 million for the electric aerial vehicle (EAV) maker, which followed a $500 million investment from Toyota.

As to the actual vehicles, Vertical Aerospace is proceeding with its flight test program on the road to certify its VX4 flying vehicle.

Vertical Aerospace earlier had received a funding commitment of $50 million from Stephen Fitzpatrick, the company founder who stepped down as CEO earlier this year.

In its first testing phase, Vertical flew its electric aircraft uncrewed at Cotswold Airport.

Vertical’s partners included Honeywell, which is designing the aircraft control system, and GKN Aerospace, Hanwha, Molicel, Leonardo and Syensqo. 

Rolls Royce, an original investor in Vertical, late last year decided to leave the electric flight business and put its advanced electric propulsion systems business up for sale.

The EAV maker is building its flying vehicle to feature more advanced technology and is aiming for certification by the end of 2026. Vertical already has received design organization approval from the CAA.

Vertical Aerospace plans to continue to operate from its U.K. headquarters.

Related:Air Taxi Company Seeks $200M From Stock Offering; $5.05 a Share

“The U.K. has been at the forefront of the aerospace industry for the last 100 years,” said Jason Mudrick, founder and chief investment officer at Mudrick Capital. “Aviation is one of the hardest sectors to decarbonize but ambitious British companies like Vertical are leading the world in pioneering zero emissions electric aircraft.”