Volocopter, the German air-taxi startup, has raised €50 million in its Series C funding round, with the financing led by Chinese auto major Zhejiang Geely Holding Group Co., the company that owns Volvo, Lotus, and other car manufacturers. With this round, Volocopter’s total investment raise over the years stands at €85 million.
“Geely is transitioning from being an automotive manufacturer to a mobility technology group, investing in and developing a wide range of next-generation technologies,” said Li Shufu, chairman of Geely, in a statement. “Our joint venture with Volocopter underlines our confidence in Volocopter air taxis as the next ambitious step in our wider expansion in both electrification and new mobility services.”
Though the company has not disclosed its valuation, Volocopter’s CFO Rene Griemens stated that Geely would take a 10% stake for less than half of its investment, which puts the company’s valuation in the ballpark of €200 million to €250 million. Volocopter has set itself a tight roadmap to commercialization, stating that it looks to have its service running in cities within the next three years.
“Urban mobility needs to evolve in the next few years to meet rising demand,” said Florian Reuter, CEO of Volocopter, in a statement. “With our Volocopter air taxis, we are adding a whole new level of mobility in the skies.”
The air taxi segment is relatively new to the mobility scene, rising in relevance across highly congested urban cities, which find it hard to accommodate all the traffic on the streets. Air transit across short distances looks appealing in that context, as existing building infrastructure within city centers make it hard for local governments to expand roads or draw up new transport lines.
One of the primary concerns revolving around this mode of transport is the sustainability part of the air taxis. Unlike other mobility-as-a-service (MaaS) business models that have cropped up in recent times, air taxis are highly energy-intensive while also carrying a minuscule number of people compared to MaaS systems like e-bike or cab sharing. However, with economies of scale, air taxis can offer rides at prices that could be made affordable to larger sections of the population.
Though the niche is still not commercialized and has only registered a few pilot runs, the air taxi landscape is fertile with companies like Uber, Lilium, and Kitty Hawk, which are racing to provide people with an urban transit alternative.
Griemens mentioned that the recent investment raised by Volocopter would be channelled into several niches within the company, including research and development, safety and regulatory standards, product design, and business development. Government regulatory hurdles are expected to play a huge part in the timeline of the segment’s commercialization, as flying over city skylines incur significant risks for people.
However, Volocopter has found traction across several countries, inking partnerships with China, Singapore, and Dubai, among others. In 2016, the Volocopter received a flying permit to participate in regular air traffic, helping it clock several hundred test flights and finally develop an electric vertical take-off and landing (eVTOL) minimum viable product.
Volocopter’s eventual plan is to remain an air taxi manufacturer while partnering with local firms for running the services. Even though the air taxis are designed to run autonomously, it would be requiring pilots at least in the initial stages, who would sit at the driving seat for manual assistance if required. The company believes that in about a decade, the price of a ride on a Volocopter air taxi would roughly be equivalent to that of a ground taxi ride.