Cash-pinched Lilium to raise $250M for air taxi certification push

Just a month after reports circulated about its increasingly tight financial situation, German air taxi developer Lilium says it has secured $100 million in what it expects will be $250 million in new funding.

Lilium released a communiqué Tuesday announcing a “capital raise for up to $250 million, with $100 million funded at close” of the trading day. That up-front amount was supplied by Singapore-based Aceville, an affiliate of China’s Tencent Holdings that already owns 23.4% of Lilium. The Munich-based air taxi maker says the influx is expected to “cover most of the estimated capital required to achieve (its) first manned flight of the type-conforming aircraft,” and on through certification.

Read: Air taxi maker Lilium faces funding pinch in crowded AAM sector 

News of the new funding is good news for Lilium, which ended March with only about $175 million in cash and financial assets. At that time, the air taxi company’s burn rate was sufficiently high that most observers forecast its coffers running dry sometime this summer without renewed financing.

That now comes from Tencent, whose $100 million investment is doubly generous in it purchasing 184.2 million Lilium warrants for $1 per share. The company’s stock had been trading at just $0.43 before word of the injection was released, then nudged up to $0.55 on the news.

“The capital raise announced today marks an important development in our ongoing mission to revolutionize the aviation industry,” said Lilium CEO Klaus Roewe. “With this financing, we are excited to continue our development program at full pace. We remain in multiple constructive discussions with existing and potential new investors. We hope to announce further updates soon.”

Despite the lifeline, Lilium is not entirely out of the financial woods yet – or certain to obtain the full $250 million it says will cover its push to obtain certification and launch its air taxi in 2025. 

For starters, Tencent will provide $75 million of the remaining $150 million being sought only if Lilium raises the other half through other equity partners, debt, or from German and European Union grants.

Meantime, despite Tencent’s willingness to pay a buck per share under the transaction, even Lilium’s rebounding share price of $0.50 is well below the $1 minimum required to avoid eventual de-listing by NASDAQ. That, were it to happen, would inflict a blow to the air taxi developer’s reputation, and complicate any future financial recruitment.

Lilium’s scramble for funding is a further challenge to its efforts to complete its battery-powered aircraft and usher it through certification amid what has become a rather crowded air taxi sector. 

Read: Air taxi maker Joby bags two major eVTOL deals as April ends

US rivals Joby, Archer, and Wisk are all advancing swiftly through the certification process, backed by deep-pocketed investors and industry partners. Even German competitor Volocopter – which unlike most leading air taxi companies avoided taking the company public to raise funding – has steadily advanced its work while Lilium has had to juggle aircraft development activity with searches for new finances.