No longer just a dream envisioned by The Jetsons, flying taxis are being taken seriously by leading investors, automakers, and aviation companies, and could be on the cusp of reality. In this note, we provide an analysis of the passenger air mobility space, which includes the market opportunity, advantages of eVTOL aircraft, considerations for investors, financing trends, top investors, leading startup aircraft manufacturers, and our top choices for early stage “picks and shovels” enablement technologies.
Among the findings:
- In the first quarter of 2021, investors poured a staggering $3.8 billion into eVTOL air taxi startups such as Joby Aviation, Archer, and Lilium, largely through SPAC mergers and concurrent PIPE deals. Investment in Q1 2021 marks more than triple the $1.1 billion invested in all of 2020.
- We forecast the global air taxi passenger mobility market to grow from a burgeoning $1.5 billion in revenue in 2025 to $150.9 billion in revenue in 2035. eVTOL aircraft have major operating cost advantages over helicopters and could make passenger air mobility affordable to the masses.
- Timeline expectations may be inflated as investors underestimate the complexity and capital cost of certification, as well as the technological, regulatory, and infrastructure-related hurdles required for mass adoption.
- Well-capitalized startups with established manufacturing partners are poised for success, while a shakeout may be in the cards for many of the 100+ startups developing technology in the space.
- We see opportunity for early-stage VC investors to back “picks and shovels” enablement technologies, such as mobility services, autonomous autopilot, and engineering analysis tools.