Munich, Düsseldorf A German investor makes the next huge deal in the hotly contested air taxi segment: Lukasz Gadowski and Team Global are investing 100 million dollars in the Chinese company Autoflight, as the Handelsblatt exclusively learned. The financing notification comes shortly after the maiden flight of your V1500M aircraft. And it is particularly noteworthy after the recent tough regulatory measures in the tech sector in China.
Numerous new regulations have recently unsettled the Chinese technology sector and investors. China’s government is increasingly critical of foreign investor participation in sensitive areas. They worry that sensitive data and know-how could fall into the wrong hands. The regulations therefore seem difficult to calculate.
Autoflight founder and managing director Yu Tian is still unconcerned: “We are not affected by the new data security laws because we do not collect any data,” he says. He sees “no problems with foreign investments” in the field of electrically powered whiz kid (eVTOL). The only restriction is that a foreign investor is not allowed to hold more than 50 percent.
However, precautions have been taken for the Shanghai-based company. “We’re not investing directly in the company in China, but in a VIE company in the Cayman Islands,” says Lukasz Gadowski. This is an offshore jacket that, in case of doubt, has no access to the operative business in China.
Top jobs of the day
Find the best jobs now and
be notified by email.
Most Chinese companies that go public abroad choose this construction in order to circumvent restrictions on foreign investors in certain areas. China’s supervisors are currently critically reviewing the VIE constructions. What consequences they will draw cannot yet be foreseen.
“Acceptable risk”
Gadowski sees this as “a justifiable risk.” He knows that there could be further restrictions, especially with the planned global expansion, given the growing tensions in the relationship with China. “There is definitely the risk that we will fall under export control restrictions.”
Gadowski co-founded the Dax group Delivery Hero and is an experienced investor. There are also other air taxi manufacturers in the portfolio of his Berlin technology holding, Team Global. Because he is convinced of the segment, believes various regional market leaders are possible: The goal is to “enable mass individual traffic in the air”. In Europe, Gadowski relies on Volocopter from Bruchsal. In the USA he has a stake in Archer from Palo Alto, California.
The Chinese founded Autoflight in 2017.
The 360-employee company Autoflight is the largest single investment for Team Global to date. This also shows how convinced Gadowski is of his cause despite all the risks. “I have heard what Tian has promised and achieved for the past three years. And what others have announced and achieved. That created trust, ”he says. You have to know that other founders in the segment have too ambitious goals.
The model could be relatively easy to certify
Autoflight wants to compete with a four-seater that will be able to fly autonomously in the long term. The technical concept for the Octocopter V1500M is considered traditional: The aircraft has eight propellers for ascent at the top and two push propellers for forward flight at the rear. Unlike the listed Joby Aviation from California and Lilium from Weßling, it does not have a pivot mechanism. “The concept with static propellers is simpler and should be easier to certify,” says a drone expert, who does not want to be named here.
There are doubts in the scene as to whether a Chinese company will have an even more difficult time in the process than its competitors. Certification is considered a sticking point for air taxi manufacturers.
Yu Tian started Autoflight in 2017 with a lot of engineering experience. With the company Yuneec he had already built up a mass production for model airplanes (so-called foam waffles) and sold them millions of times. The company later entered the light aircraft business. In the spring of 2011, a dramatic incident rocked the company: a test pilot crashed.
The tragic accident at Yuneec was “due to technical and human failure”, the company emphasizes in a statement. This had been processed in an extensive investigation. The incident hit Yu badly.
With a view to Autoflight, the Chinese founder emphasizes that safety is the top priority. The company therefore wants to start cautiously: “from small to large, manned by freight”. Autoflight is already using an unmanned delivery drone in China. For example, it delivers seafood by flight from the island of Zhoushan to Shanghai. In the current year, the delivery drone is expected to fly in sales of five million dollars.
At the end of 2020, the Chinese civil aviation authority had already put 13 civil unmanned test bases into operation and, for the first time, allowed vertical take-off and landing unmanned fixed-wing aircraft for the transport of logistics goods over long distances to islands. In China, the airspace is very strictly managed. However, there are pilot projects to open up the low-altitude area to encourage innovation in the industry.
The V400 Albatross model can transport up to 100 kilograms and, according to the company, has a range of 210 kilometers purely electrically. So far, the company flies in uninhabited areas, it is said to have already collected 10,000 flight hours. “Next year we’re planning sales between $ 20 million and $ 30 million,” says the CEO.
In addition to Autoflight, the serial founder and investor has other air taxi companies in its portfolio: Volocopter from Bruchsal and Archer from Palo Alto, California.
The partners also hope for a market advantage through comparatively low production costs: “We have cost advantages through the simple design and because we build all core components ourselves,” says Yu. Production in China should also play a role. “The Shanghai region is the best place to build a supply chain,” says the CEO, who studied in the US and worked in Munich before the pandemic.
As the next steps for his company, he mentions the construction of a factory near Shanghai, the hiring of a team in Munich that will be responsible for the European flight safety authority EASA and the successful transition flight, i.e. the transition from ascent to forward movement. In the medium term, another branch with a test center is to be set up in North America.
$ 500 billion equity is still needed
Gadowski estimates the additional equity required until the start of passenger transport at half a billion dollars. Several competitors raised similar sums with a Spac IPO. The parties have agreed not to disclose the evaluation of Autoflight. Nothing is known about the amount of previous investments either. Angel investors and TDK Ventures, the venture arm of the Japanese electronics manufacturer of the same name, are involved.
The further financing opportunities for Autoflight also depend on China. According to the Reuters news agency, many private equity and venture capital funds have recently shifted their investments because of the regulatory measures: Instead of data-intensive and consumer-oriented Internet companies, they are now more involved in the semiconductor and renewable energies sectors. But the situation can change again.
“Investors in China today have to find their way in a changing political environment and ensure that investment hypotheses are in line with regulatory requirements,” says Akio Tanaka, who invests in Beijing for venture capital firm Headline. “That doesn’t mean that there are no more investment opportunities in China, but we have to be more selective.”
More: “The jet has to stay in sight” – the Lilium boss explains what air taxis can really do at the moment