Financial pressure on eVTOL aircraft developer Volocopter appears to have eased, with confirmation last week that the German company has secured further funding. In a short written statement, the company said it had secured finance from several existing undisclosed shareholders but refused to identify these backers.
According to a Volocopter spokesperson, the company does not expect to be able to say more about its financial situation until a funding round closes in the fourth quarter of this year. The statement indicated that the company has sufficient funding to complete type certification of its two-seat VoloCity eVTOL model, which it now expects to achieve with EASA at the end of this year.
The somewhat minimal program update implied that Volocopter will not achieve its earlier goal of getting an EASA type certificate in time to fly the VoloCity aircraft with passengers during the Paris Olympic Games in July and August. However, the company has indicated that it may yet conduct the flights under some type of special dispensation.
“This year, Volocopter is determined to achieve our development milestones toward type certification and fly in Paris in the summer when all eyes are on the city,” the private company said in its statement.
In April, a standoff between the German federal government and Bavarian state politicians stalled an agreement over loan guarantees for both Volocopter and fellow German eVTOL developer Lilium. Two weeks later, Bavaria-based Lilium reported that the due diligence process for the new sources of financing had begun. However, Volocopter, which is based in the state of Baden-Württemberg, appears to have had to seek alternative sources of funding.
Possible Saudi Arabian Funding
According to Robin Riedel, who co-leads consulting group McKinsey’s Center for Future Mobility, Volocopter is among several eVTOL start-ups now struggling to secure sufficient funding to bring their aircraft to market. “The advanced air mobility sector is at the difficult pre-revenue phase, when companies are generally too small to attract private equity money and too big for early venture support,” he told AIN.
Riedel suggested that Volocopter may seek new backing from sources such as the Saudi Arabian regional development project Neom. In November 2022, Neom supported Volocopter's Series E funding round, which was also supported by Hong Kong’s GLy Capital Management. In his view, governments and companies in the Gulf region are increasingly positioning themselves to support the earliest commercial use cases for eVTOL aircraft such as those being produced by Archer, Joby, and Eve Air Mobility.
The Neom development in the northwest of Saudi Arabia is supposed to hinge on a vast new “smart city” called The Line, which would include eVTOL air services. The Line was supposed to extend some 106 miles into the desert from the Red Sea coast and have no cars. However, Saudi authorities have more recently suggested that just 1.5 miles of the development will be complete by 2030. The project attracted adverse attention when it was reported in May that Saudi forces shot and killed a resident of a village that was being forcibly cleared to make way for the development.