German electric vertical takeoff and landing (eVTOL) aircraft developer Lilium says it has secured over $190 million in additional financing designed to allow it to advance work on its air taxis into test flight phases.
Lilium announced the new funding as a mix of new share offerings and direct infusions from investors. The search for additional financing issues directly from the company’s statement in May that it was aiming to raise a total of $250 million, a chunk of which would be provided by longtime backer Tencent Holdings conditional on matching money being found.
The revealed initiative appears to fulfill those requirements, and is expected to permit cash-drained Lilium to work into the first flights of its eVTOL, which it hopes to launch into air taxi services after expected certification in 2025.
Read more: Cash-pinched Lilium to raise $250M for air taxi certification push
The de rigueur tangle of details in such deals indicates Lilium will collect $75 million from the issuance of new shares – an enlargement of its pool that, not surprisingly, led to an immediate but likely ephemeral price decline on markets. Tencent will inject its promised $75 million through its Aceville affiliate, with another $42 million coming from equity and warrants issued to Earlybird Venture Capital.
Lilium described those inflows as “incremental to $100 million received in May,” and as such an add-on to Tencent’s earlier support of the Munich-based air taxi developer’s work on its cutting-edge but expensive eVTOL craft.
July 19 update
In addition to confirming on Tuesday it had taken in the $192 million in new capital sought, Lilium has also managed to raise an additional $83 million in financing – lifting its current cash reserves to what it said was a total of $386 million.
Details of it surpassing the $250 million target it set in May was contained in a filing late last week with the US Securities and Exchange commission. In it, Lilium provides details of capital infusions it had initiated, as well as additional funds received. Included in those is a “concurrent $42 million private placement,” and other equity transactions lifting its new reserves to “approximately $386 million of cash available.”
That cushion is expected to permit Lilium to advance development of its eVTOL into the test flight phase, though sector observers say the company may require nearly $100 million more to usher the air taxi through certification and production launch.
Though Lilium’s in-wing jet propulsion design is novel and quite sophisticated in eVTOL design, the extra power it requires has made battery investment a higher drain than most air taxi rivals face. Indeed, the company’s cash-burn rate has been such that by last March experts estimated the company only held about $175 million in cash and financial assets.
Resolving recurring financial pressure is critical for Lilium as it enters the push to obtain certification of its eVTOL in the US and Europe, and launch air taxi services soon after.
Lilium is far from the only startup in the crowded eVTOL sector experiencing funding tensions. Yet unlike rivals including Boeing-backed Wisk and Embraer air taxi unit Eve Mobility, it doesn’t enjoy the financial support of aviation industry heavyweights as it enters the critical phase of development.
Read: Lilium adds FAA eVTOL basis of certification approval to earlier EU air taxi spec authorization
Given that ambient economic pressure – especially with markets wary of providing more money until eVTOL companies start generating income – many sector observers expect significant consolidation as the clock toward initial anticipated air taxi launches in 2025 ticks down.
For that reason, many wonder whether – were draining accounts to pose an existential threat to its certification plans – an advanced but relatively small firm like Lilium might become a source of interest to aviation giants like Airbus – whose own lower-profile work on next-generation craft has raised suspicions about it planning to super-charge its in-house program through the acquisition of a respected third-party entity.
Read: Air taxi eVTOLs star at Paris Air Show’s first aerial mobility section
For its part, Lilium has continually sought additional lines of income and profit for what it expects to be its independent air taxi manufacturing and operation into the future. Those activities include developing longer-range capacities for regional transport operations, and direct sales of its battery-powered planes to affluent clients who may decide to shun public aerial services for eVTOLs of their own.
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