Air taxi start-up Vertical Aerospace Group said late Thursday it intends to go public with nearly $400 million in new funding from a number of big-name partners who have also agreed to order up to 1,000 aircraft.
Vertical has a deal to merge with special purpose acquisition company (SPAC) Broadstone Acquisition (BSN). The deal values the combination at about $2.2 billion and includes investments from American Airlines Group (AAL -0.07%), air-leasing company Avolon, and Virgin Atlantic airline, as well as an investment arm of Microsoft.
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Vertical Aerospace's main product is the VA-X4, a piloted, zero-emissions electric-vertical take off and landing (eVTOL) vehicle. The airplane/helicopter hybrid is expected to have a range of 100 miles and capacity to carry four passengers along with a pilot at speeds up to 200 miles per hour.
These so-called air taxi developers are becoming a hot commodity on Wall Street. China's Ehang Holdings is already public. Another start-up, Joby Aviation, has a deal pending to merge with SPAC Reinvent Technology Partners. And Embraer is reportedly in talks to merge its eVTOL unit with Zanite Acquisition, also a SPAC.
Vertical has a competitive advantage in the form of its investors. American, Virgin Atlantic, and Avolon together have committed to buy up to 1,000 aircraft. American, which said it has a "pre-order" of 250 aircraft with an option to order an additional 100, in a statement said eVTOLs could be a key part of its push to go green.
"Emerging technologies are critical in the race to reduce carbon emissions and we are excited to partner with Vertical to develop the next generation of electric aircraft," American Chief Financial Officer Derek Kerr said. "For years, American has led the industry in investing in newer, more fuel-efficient aircraft. Today's partnership is another example of that commitment, and an investment in the future of air mobility."
While small eVTOLs can't replace commercial aircraft, they could provide greener alternatives to funnel a small number of passengers to large hub airports.