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Volocopter, one of Europe’s most prominent flying taxi start-ups, is in urgent talks with investors to secure additional funding after failing to clinch up to €100mn in government convertible loans.
Volocopter is one of a large group of flying-taxi companies that have attracted billions of dollars of investment to develop “electric vertical take-off and landing” vehicles that can navigate urban areas, but which have struggled with high development costs and getting regulatory approval.
Dirk Hoke, chief executive of the German-based company, said it had been forced to activate a “back-up plan” after officials in Bavaria unexpectedly put on hold a decision over a package that would also have unlocked funding from the federal government. Volocopter had applied for a convertible loan of €100mn, to be split equally between the state and federal government.
“It shows that we [in Europe] are very great at innovation but that we struggle on the way to commercialisation,” Hoke told the Financial Times, adding that “access to risk capital is much more complicated in Europe than in the US”.
Volocopter was in talks with existing and new European-based investors to support the “stabilisation of the company”, he said.
The setback, added Hoke, had prompted concerns among other start-ups in Germany, which feared encountering similar difficulties in accessing state support.
He declined to comment on the identity of the new investors, as well as on how much Volocopter was seeking to raise, but said an agreement was likely to be reached “within days”.
Volocopter’s existing backers include Mercedes-Benz, Geely and Microsoft. By last year, the company had secured more than $760mn in total funding.
The setback for Volocopter, which was set up more than a decade ago, comes at a critical time for the nascent air taxi industry, which has been struggling to lift off. The sector has attracted billions of dollars and high-profile backers including airlines, aerospace and car manufacturers, as investors have bought into the promise of fast and affordable transport in the skies.
Yet challenges to fund expensive development and test-flight programmes, as well as difficulties in getting regulatory certification have repeatedly forced companies to push back key milestones.
Hoke insisted that despite the funding crunch Volocopter’s plan to fly its two-seater VoloCity as early as this summer’s Paris Olympics remained on track. The company might not, however, be able to offer a commercial service as early as then as it was still in talks to secure certification from the European air safety regulator. It still expected to gain this by the end of the year, said Hoke.
Also on Thursday, Britain’s flying taxi pioneer Vertical Aerospace announced that its founder and chief executive Stephen Fitzpatrick was handing over the reins of the company to chief financial officer Stuart Simpson. Simpson, who joined last year from the internet security company Avast, takes over immediately.
Fitzpatrick, who also founded home energy supplier Ovo Energy, recently committed up to $50mn of his own money to help Vertical complete its flight testing programme. He will remain on the group’s board.
The German transport ministry did not respond to a request for comment.
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