- Joby Aviation takes over Uber’s air taxi business.
- Archer Aviation and Joby Aviation together value $10 billion.
- Archer Aviation plans to go public soon.
Joby Aviation is reportedly in negotiations to go public in a SPAC transaction. This is one year after picking up $590 million from Toyota-led investors. And, a few months after picking up Uber’s flying taxi company, that would be worth nearly $5.7 billion to the electric aircraft manufacturer. The news of a possible agreement comes on the heels of another significant SPAC electric aircraft sale (for Archer Aviation). For start-ups producing vehicles driven by something other than hydrocarbons. It’s a heady moment, and the SPAC wave has hit it hard. Arrival, Canoo, ChargePoint, Fisker, Lordstown Motors, Proterra, and The Lion Electric Company are some of the companies that have joined or announced plans to combine with SPACs over the past year.
Investment in electric aviation
Now it seems like any enterprise that has something to do with the electrification of any mode of transportation. It will be waved onto the runway for a public listing via a special purpose acquisition company vehicle. A wildly common route at the moment for companies that would find conventional IPO listings more difficult to conduct. But would rather not stay in start-up mode when it co-operates.
Reportedly, the investment party took Joby to the moon! Reid Hoffman, the co-founder of LinkedIn, and Mark Pincus, who founded the casual gaming firm, Zynga, are the billionaire tech pioneers and investors heading the public markets. Reinvent Technology Partners is a special purpose acquisition firm. The shell corporation went public and raised $690 million to make a deal.
The company’s investors include Toyota, Baillie Gifford, and Intel Capital. JetBlue Technology Ventures (the U.S.-based airline’s investment arm), and Uber also participated.
Joby’s FAA Certification
Joby has a 600-flight prototype but has yet to be certified by the Federal Aviation Administration. The success of any deal between the company and the SPAC community of Hoffman and Pincus is far from a sure thing. The deal would entail an additional capital injection into the SPAC that was founded by the two men, and all bets are off without that extra cash. Indeed, it is possibly one of the reasons why people are now reading about it.
Alternatively driven transport vehicles of all stripes and covering all modes of travel are the rage. Part of that is due to growing pressure from institutional investors. Companies in which they can invest with an environmental, sustainability, and good governance thesis. A part of that is due to tailwinds coming from government legislation pushing for fleet decarbonization in an attempt to curb global warming.
Environmental effect of electric aircrafts
The effect on the environment is one of the key factors that United Chief Executive Scott Kirby cited. While talking about his company’s $1 billion purchase order from the electric aircraft company. It declared earlier this week that it would seek a public offering via a SPAC. “United is showing the aviation industry by working with Archer that now is the time to embrace a cleaner, more efficient modes of transportation,” Kirby said. “We can curb the impact aircraft have on the planet with the right technology. But we must identify the next generation of companies that will make this a reality early on and find ways to help them get off the ground.”
It’s also an investment in a potential new business line. It could potentially shuttle United passengers to and from an airport. Less than a year after Archer Aviation came out of stealth, the agreement to go public and the United Airlines order arrived. Adam Goldstein and Brett Adcock, who sold their software-as-a-service business Vettery to The Adecco Group for more than $100 million, co-founded Archer in 2018. Marc Lore, who sold his business Jet.com to Walmart in 2016 for $3.3 billion, was the company’s biggest backer. Up until January, Lore was Walmart’s e-commerce leader. Take heart for any SPAC founders or venture capitalists afraid they are now left out of the EV aircraft investment bonanza! The German software maker, Lilium, is still there. And if an investor has an interest in supersonic flight, Boom is still here.