Lilium secures fresh money – Earlybird comes on board

Representation of a Lilium jet at the terminal

Lilium is planning a regional service with its own airports for its electric VTOL aircraft.

(Photo: lilium)

Berlin, Frankfort The German air taxi company Lilium is getting a little closer to its maiden flight. The company secured a total of $150 million from investors, according to a statement to the US Securities and Exchange Commission. As promised in May, the Chinese investor Tencent will contribute half of the sum. “We’ll take the lead for the other half,” Hendrik Brandis, partner at German venture capitalist Earlybird, told Handelsblatt.

Lilium has thus managed to close a large part of its acute financing gap and should thus be able to bridge the period until the manned maiden flight. This should take place in the second half of next year. It is the prerequisite for the certification of the electric VTOL, which in turn is necessary for the business with the jets to get started in the first place.

Brandis, who himself studied aerospace engineering in Munich, is one of the early investors in the rocket start-up Isar Aerospace. On the other hand, he kept his hands off Lilium for a long time. “We were not among the early investors because we had too much respect for the technical and financial challenges. For a long time we weren’t sure where the journey was going. But now the main obstacles have been overcome and the maiden flight is not far away.” That is why one is confident that the bet will ultimately work out. Brandis also made an exception for this: Normally, the financier of start-ups such as N26 and Aleph Alpha does not invest in listed companies.

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Lilium went to the US stock exchange Nasdaq almost two years ago via a spac (empty stock market shell). At that time, the company from Wessling, Bavaria, was valued at around three billion dollars. However, Lilium is far from that now. The market value is currently around 660 million dollars, in the meantime it was even only a third of that.

Brandis states: “Due to the current valuation, Lilium offers an attractive risk/reward ratio.” The market for so-called electric vertical take-off-and-landing aircraft (eVTOL for short) is competitive. Many different providers are fighting for a place in the traffic of the future with different approaches. They all agree that they still need the necessary approvals from the supervisory authorities.

But there have already been bankruptcies. For example, the US company Kitty Hawk had to shut down operations.

China is waiting for seven-seaters

Lilium wants to build a seven-seater with 30 ducted and tilting rotors. This concept caused a lot of discussion and criticism in the aviation industry. The foldable rotors would consume much more energy than air taxis with permanently installed, large rotors, such as those used by Volocopter from Bruchsal near Karlsruhe. Above all, the transition from vertical ascent to gliding and later back to vertical descent is considered tricky.

But unlike many other providers, Lilium also wants to cover longer distances with its flight vehicle. That is why the company relies on a concept that is similar to that of the airplane. The Lilium-Jet has wings designed to increase efficiency during cruising.

Lilium jet cabin

The Lilium Jet is to be launched as a seven-seater. In the VIP variant, however, it should take off with fewer seats.

(Photo: Lilium)

For the time being, however, Lilium wants to offer premium traffic as a charter service. At the end of May, the Swiss private jet and helicopter company Air-Dynamic signed a contract with Lilium. The company wants to buy up to five jets to be operated for customers in Switzerland and Italy. The premium equipment is to be supplied for this, the so-called club configuration. Air-Dynamic pays a deposit for the aircraft. This is important for Lilium, because this money also secures the financing until approval. Later, Lilium wants to serve regional routes.

In the meantime, Lilium has reached several important milestones. The current demonstrator flew for the first time at the full speed of 250 kilometers per hour. In addition, the company received the so-called G-1 certification basis from the US Federal Aviation Administration a few days ago. It stipulates what the jet must meet in order to be approved. Lilium has already received these important documents from the European regulator EASA.

Short sellers are eyeing Lilium

Nevertheless, Lilium is repeatedly targeted by short sellers who are betting on a fall in the share price. Just a few days ago, Iceberg Research published a new report. There it says that the company only has money for eight months and that the order book is not resilient. However, the report only caused a manageable price decline for a short time, after which it went up again.

Brandis from Earlybird does not want to let such statements stand: “Lilium has a very large order pipeline.” However, it remains unclear for the time being how large the market for the Lilium jet is outside of VIP traffic. Lilium has already concluded numerous partnerships for the development of regional services, for example in the USA. However, it is still unclear whether all of this will be enough to set up commercial production of the jet.

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