The German air taxi company was able to collect fresh funds from investors.
(Photo: lilium)
Frankfurt The German air taxi company Lilium has raised fresh money from investors. According to a statement to the US Securities and Exchange Commission, Tencent is providing $100 million. The internet company from China is already one of Lilium’s major investors. Tencent has also pledged to give another $75 million if Lilium’s management succeeds in raising the same amount from other investors.
This should be good news for the Lilium leadership. Should the company actually receive $250 million in the end, a foreseeable financing gap would be largely closed. Lilium wants to carry out the manned maiden flight with its jet in the second half of next year. It is the prerequisite for the following certification of the electric vertical take-off.
But so far the money has not been enough. “We’re missing about $300 million before the manned first flight,” co-founder Daniel Wiegand, who is responsible for innovation in management, recently told the Handelsblatt. The company cannot currently raise the necessary funds via the stock exchange. The share price has lost more than 90 percent since the IPO in September 2021.
In the most recent letter to shareholders, Lilium pointed out that the company still had 206 million euros in liquidity at the end of 2022. For the first half of 2023 alone, the company is planning a budget of 125 million euros. So it is easy to calculate that the funds would have been enough for a maximum of one year. With the new round of financing, the team can now continue working.
The Lilium-Spitze can now see another problem a little more relaxed. Because of the low share price, Lilium has now been informed by the US technology exchange Nasdaq that staying on the platform is at risk. The exchange operator does not accept penny stocks. Management now has 180 days to counteract the course.
Hype about air taxis is over
It won’t be easy – the big hype surrounding air taxi companies is over. Many investors finally want to see that the idea of electrically powered high-flyers becomes sustainable business models. But Tencent’s funding commitment could help Lilium’s leadership regain trust among shareholders. The news could also motivate other investors to give money as well.
“The financing round is an important development in our mission to revolutionize the aviation industry,” Lilium CEO Klaus Roewe said in a statement. One is in numerous constructive talks with existing and new investors. “We hope to provide more updates soon.”
Lilium wants to build a seven-seater with 30 ducted and tilting rotors. Initially, premium traffic will be offered as a charter service, and later regional routes will be served. The current demonstrator recently reached an important milestone. He flew for the first time at the full speed of 250 kilometers per hour.
More: Air taxi company Lilium threatens to be kicked out of the Nasdaq