Lilium today signaled its intent to stay among the frontrunners in the crowded advanced air mobility market, announcing that an $830 million IPO merger with Qell Acquisition Corp will fund the development of its seven-seat eVTOL aircraft. The German company confirmed that the series production Lilium Jet due to enter commercial service in 2024 will have two more seats than the current five-seat technology demonstrator.
Qell, which is a San Francisco-based special purpose acquisition company (SPAC) led by former General Motors North America president Barry Engle, will now file for a Nasdaq listing with the U.S. Securities and Exchange Commission. Total gross proceeds from the deal are projected at $830 million, including $380 million in cash and the proceeds from a $450 million Private Investment in Public Equity (PIPE) investment with backers including Baillie Gifford, BlackRock, Tencent, Ferrovial, LGT/Lightrock, Palantir, FII Institute and PIMCO. The combined company is expected to be valued at around $3.3 billion based on the $10 PIPE share price when the transaction is complete by the end of the second quarter of 2021.
The deal makes Lilium the third eVTOL aircraft developer to raise capital via a merger-based IPO with a SPAC partner. In recent weeks, Archer and Joby Aviation also have announced plans for Nasdaq listings that are expected to raise, respectively, $1.1 billion and $1.6 billion.
Another rival, Volocopter, recently took its total funding to almost $400 million with a $240 million Series D round. The German company is widely expected to pursue a SPAC-based IPO itself.
Following months of speculation about the larger all-electric Lilium Jet, the German company has confirmed that back in 2018 it filed concurrent type certification applications with both EASA and FAA for the aircraft, which will carry a pilot and up to six passengers. Last year, EASA confirmed the CRI-A01 certification basis for the new type, which is equivalent to the G01 process for FAA.
The Lilium Jet is projected to have a range of over 155 miles and a cruise speed of 175 mph at 10,000 feet. This performance is slightly lower than the 186 miles/186 mph targets for the five-seat technology demonstrator, reflecting tradeoffs being made to secure the additional payload.
The aircraft is powered by the company’s patented Ducted Electric Vectored Thrust (DEVT) propulsion system. According to Patrick Nathen, this same architecture can be used to scale up future models, with even larger Lilium Jets with 10 to 15 seats envisaged. Over the past five years, the company has developed four generations of technology demonstrators before settling on the current format for the series production aircraft.
The 36 electric motors are encased in nacelles that have a similar architecture to turbofan engines on existing airliners. According to Lilium, these will deliver the low-noise profile that is required for flights in and out of populated areas.
Barry Engle is expected to join the Lilium board, which already includes former Airbus CEO Tom Enders. Existing Lilium shareholders will roll all of their equity into the newly merged company, with CEO and co-founder Daniel Wiegand holding 3:1 super-voting shares
Lilium now has more than 400 engineers working on the program, drawing on their past experience with leading aerospace groups including Airbus, Eurofighter, and Gulfstream, as well as including some veterans from the Harrier VTOL military aircraft. Manufacturing partners for the program include composite materials specialist Toray Industries and Aciturri, which will make the fuselage and wings. Final assembly will be conducted at Lilium’s 100,000 square foot manufacturing facility near Munich.
Commercial services are set to begin in Florida, where it has plans to build a network of at least 14 vertiports across the state, starting with the Lake Nona community near Orlando. Its partners for this initial network are Spain-based airports group Ferrovial and U.S.-based property group Tavistock Development Company and between them, the companies have committed to investing $200 million. According to Lilium, it is in advanced discussions with other prospective infrastructure partners to develop 10 vertiports across Europe. In Florida, Lilium faces potential competition from Archer, which has announced plans to launch service with its four-passenger eVTOL aircraft.
Lufthansa Aviation Training is responsible for training the pilots who will fly the Lilium Jet. Flight crew will be employed by as-yet-unnamed airline partners who will provide services in a network that Lilium will oversee. “We will only provide the ‘digital platform’ on top of the network with the actual operations conducted by airline partners who will hold their own air operators certificates,” Wiegand explained to FutureFlight. He indicated that the same partnership approach will be taken with infrastructure providers, in order to spread the investment load for the planned network.
Lilium describes its business model as “regional shuttle services,” with the company having determined three years ago to focus on longer intra-city flights rather than joining the scramble to use eVTOL aircraft for largely-urban on-demand air taxi services. Wiegand explained that its approach will involve a mix of scheduled flights with some “flexible” flights in the mix to adapt to fluctuating levels of demand.
This summer, the Lilium engineering team expects to resume flight testing with the five-seat demonstrator as they prepare for the first fully-conforming prototype to be built in 2022. Five or six of the series production prototypes will be used to support flight testing for the type certification campaign.