Around USD900 million was invested in the urban air mobility market in the first six months of 2020, but new research with senior private equity and venture capital professionals reveals 59 per cent expect over USD2 billion will be invested in the sector this year.
Some 41 per cent predict the figure will be over USD3 billion, and 16 per cent think it will be more than USD4 billion.
The research was commissioned by Horizon Aircraft, the advanced aerospace engineering company that has developed the Cavorite X5, the world’s first eVTOL (Electric Vertical Take-off and Landing) that can fly the majority of its mission exactly like a normal aircraft.
The findings also reveals that over the next three years, 62 per cent of private equity and venture capital professionals expect to see an increased use in SPACs (special purpose acquisition companies), to buy, invest or raise funds for eVTOL companies. A SPAC is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company.
When asked what they think are the three main reasons why the level of investment in the eVTOL market is increasing, 64 per cent of private equity and venture capital professionals highlight the fact that more large corporations have entered the sector, providing greater confidence around its prospects. This was followed by 58 per cent who cite more M&A activity in the sector, and the listing of eVTOL companies with attractive valuations, and the third most popular key reason highlighted by 37 per cent of survey respondents is growing public confidence in the market.
Brandon Robinson, CEO and Co-Founder of Horizon Aircraft, says: “The eVTOL market is predicted to enjoy rapid growth over the next few years, and by 2050 there could be 160,000 commercial air taxis or more operating around the world, generating over USD90 billion a year in revenue. This coupled with the fact that the sector is incredibly dynamic and fast moving, means it is attracting a huge amount of interest from investors. We expect this trend to continue.”
On 18 February 2021, Astro Aerospace, a specialost in eVTOL aerial vehicles and drones, entered a binding agreement to acquire Horizon Aircraft Inc. The transaction is expected to close on or before the beginning of Q2 pending customary closing conditions.
Astro, a pioneer in the eVTOL market, has developed one of the market’s safest and most efficient eVTOLs in the world. In 2018, the Company’s drone, ‘Elroy’, was one of the first to seamlessly fly with humans on board. Astro continually defies traditional aviation design, and the acquisition of Horizon will only push the Company further, with the ability to reach greater heights working in tandem with Horizon’s exceptional team.
