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Turns out, it’s incredibly expensive to get an air taxi startup off the ground. At least, that’s what Joby Aviation is learning as it claws its way towards an ambitious 2025 liftoff deadline.
The Santa Cruz-based company is one of several vying for a prime spot in the electric vertical take-off and landing (eVTOL, for short) industry race, but it’s also one of the oldest. Formed in 2009, the company went public in August 2021, and valued at $4.5 billion, thanks in part to backing from big-name transport companies including JetBlue, Delta Airlines, Toyota and Uber. Toyota is Joby’s largest outside shareholder; it’s invested roughly $400 million to date.
Joby’s vision is that it can populate the skies of Southern California and later the greater U.S. with electric aircraft that can be used as ride-shares in the air. Think of it as Uber for the skies. The small crafts will seat one pilot and up to four riders, and could reach top speeds of up to 200 miles per hour.
If Joby and other competitors (like Silicon Valley-based Wisk Aero, Long Beach-based Odys or Skyryse, headquartered in Hawthorne) have their way, the congestion on Los Angeles’ freeways could one day be replaced with traffic in the air.
Although it reported lackluster performance in its May 3 first quarter earnings report, Joby has also seen a recent influx of cash. The company noted it lost $113.4 million, which was $51 million more than the same time last year. The company is far from profitable, and chalked the growing losses up to increased operating costs.
But Joby also recently cinched an additional equity investment from Baillie Gifford, a U.K.-based investment manager and early backer. It bought roughly 44 million shares in Joby, worth a total $180 million. In its earnings report, Joby said that cash will help it secure “near-term revenue,” likely in the form of contracts for its future air taxi services. Joby founder JoeBen Bevirt told dot.LA the company isn’t looking to raise any more capital in the near future.
Having ended its first quarter with $978 million in on-hand cash, much of which will be used to develop and manufacture its electric aircraft, as well as get it certified for flight by the Federal Aviation Administration, Bevirt noted Joby has plenty of runway to execute on existing contracts and secure new ones.
“The [Baillie Gifford] investment will accelerate early production so we can capitalize on revenue opportunities like that presented by the DoD contract extension without affecting the funds we already have available to support us through the certification process,” Bevirt noted.
Bevirt added that “we believe we’re very close to this future becoming a reality,” and said that the plan is still to roll out commercial passenger air taxi service to a yet-undisclosed “small number of select cities” by 2025. “There’s a lot of work to be done, but we’re confident in our path forward,” he said.
Joby also gained more funding for its contract to provide the U.S. Air Force with electric helicopters – an additional $55 million, extending the total contract value to more than $130 million. In addition to working for the Air Force, Joby now has relationships with the wider Department of Defense, and plans to conduct flight tests for the Marine Corps. According to the company, the Army and Navy have also expressed interest in electric aircraft, though those divisions haven’t inked contracts yet.
The Air Force is rapidly investing in new technology, and the program Joby’s part of is the government’s only investment into electric aircraft. One of the main goals of the USAF is to spur air taxi companies to accelerate their development by engaging them in an “air race” for contracts; In total there’s more than $1 billion of government funding at stake.
Bevirt said the contract “comes at a pivotal moment in history where the US government is keenly interested in leadership in electric aircraft.” He added that the White House has said advanced and clean air mobility are its top priorities, and noted, “there is tremendous enthusiasm from the government and armed forces for the commercialization of this tech.”
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Everyone hates traffic, and it’s no secret that Los Angeles has some of the worst commutes in the country. Drivers in the LA area waste an average of 62 hours – more than an entire work week – in traffic every year, making it the sixth most congested city in the country.
To cope with the taxing traffic, some local startups aren’t thinking of ways to revitalize the county’s aging and unfinished freeway system: instead, they’re looking to the skies.
Right now, the idea of zipping around Southern California in a compact air taxi seems like a Philip K. Dick pipe dream. But there’s a handful of startups in the LA area eagerly engineering electric aircrafts that they say could be operational as soon as 2024.
Some of these startups have found powerful, well-funded allies in the ground transportation sector, like Archer Aviation which is backed by United Airlines, or Joby Aviation, funded in part by Uber. Others are supported by municipalities or nonprofits like the Urban Movements Lab, which LA Mayor Eric Garcetti launched in 2020 to hasten development on new transportation tech.
Here’s dot.LA’s guide to the startups you need to know that are working on air taxis or autonomous flight in Los Angeles.
OverairOverair Raises $145M To Fly Its Electric Aircraft PrototypeImage courtesy of Overair
Location: Santa Ana
Raised to date: $170 million
Overair raised a $145 million round last month to accelerate the development of its electric plane called Butterfly, which is a vertical take-off and landing vehicle that could see its first test flight by the second half of 2023. The company’s backed by a South Korean conglomerate called Hanwha and was spun out of a Lake-forest based military aerospace contractor called Karem Aircraft in 2020. Originally, the company made tech capable of dropping Navy SEALs into combat zones.
Courtesy Archer Aviation
Location: Santa Clara
Raised to date: $2.18 billion
Archer went public in September 2021, raising nearly $858 million in a SPAC deal that made the startup a unicorn with a $1.7 billion post-deal valuation. Based in Santa Clara, Archer thinks its Maker aircraft can begin charting courses over Los Angeles at up to 150 miles per hour within the next two years. The company completed its first hover test flight last December and is gearing up for another test flight this week.
Wisk AeroWisk AeroImage courtesy of Wisk Aero
Location: Mountain View
Raised to date: $450 million
While it’s not headquartered in Los Angeles, it's worth mentioning Wisk since it’s working extensively in Long Beach. The Silicon Valley-based company began working with the city’s Office of Economic Research in February to survey local businesses, government agencies and community leaders to gauge their interest in using air taxis in and around Long Beach. Wisk spokesman Chris Brown told dot.LA the company’s air taxis wouldn’t be up and running for another decade, at least, but said the startup’s already completed over 1,500 test flights.
Joby AviationCredit: Joby Aviation
Location: Santa Cruz
Raised to date: $1.64 billion
One of the older firms on this list, Joby is working to make an electric aircraft with the goal of taking passengers on flights within the next two years. Joby claims its vehicle can travel 150 miles on a single charge and will be capable of vertical take-off and landing, which crucially could reduce the company’s need to build expensive runways. Following backing from Uber, Toyota, Intel and JetBlue, Joby went public in August 2021 which led it to quickly surpass unicorn status at a $4.5 billion valuation.
Odys AviationCredit: Odys Aviation
Location: Long Beach
Raised to date: $15.9 million
Long Beach-based Odys is building vertical take-off and landing electric planes and is aiming to create a network of local city helipads and airports that can host its vertiports. Odys was founded by James Dorris, a former engineer at Virgin Hyperloop, and Axel Radermacher, a former production manager at Karma Automotive, in 2019. The startup wants to cut door-to-door travel times in half by ferrying people across town in air taxis. It’s backed by Hyperloop One co-founder Brogan Bambrogan.
SkyryseMake Flying Simple: Skyryse’s FlightOS Gives Pilots Control With Just a Tablet
Raised to date: $240.5 million
Skyryse is working on a software that can simplify flight controls and allow people (with the proper pilot creds, of course) to control aircraft with just an iPad using its FlightOS software. The startup launched in 2016 and in 2019 it demonstrated its ability to use the tech to program a helicopter to fly itself. In April, the company inked a deal with one of its investors, the medical transport company Air Methods, to retrofit 400 of the company’s single-engine choppers and fixed-wing airplanes with FlightOS. Skyryse courted engineers from Boeing, Ford, JetBlue and SpaceX, and hired new COO Justin Ryan and CFO Stephen Koo earlier this month.
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