“Flying cars” — airborne vehicles designed for urban and other short-distance commutes to replace conventional private automobiles — are (at best) still years away from being a reality, with significant safety, technology and business model hurdles to clear before they ever hit the sky. Now, sources tell us that one of the more promising startups in the field, the German startup Lilium, wants to put itself into pole position by ramping up its financial position.
Lilium has been talking to investors to raise a big round of funding, between $400 million and $500 million, according to those familiar with its plans. “It’s a very large round at a very large valuation,” one VC told TechCrunch.
It’s not clear yet who is investing in this latest round, or what that valuation might be.
Lilium already has some deep-pocketed investors behind it. In addition to WeChat owner and Chinese internet giant Tencent, it counts Atomico, founded by Skype co-founder Niklas Zennström, as a repeat investor. Obvious Ventures, the early-stage VC fund co-founded by Twitter’s Ev Williams; LGT, the international private banking and asset management group; and Freigeist (formerly called e42), a fund led by Frank Thelen and backed in part by Christian Reber (co-founder of Wunderlist and now Pitch), among others.
In all, Lilium has raised more than $100 million in financing to date in previous rounds. But given that its plans involve not only building ground-breaking aircraft but then operating them in fleets, that’s not nearly enough to establish its service and have the impact that founder and chief executive, Daniel Wiegand, hopes he can have.
“It’s not only a benefit in terms of relieving society from transit traffic, but the much, much bigger benefit would be that everyone can use it and that people can get to their destination five times quicker, basically a five times increase of their daily radius of life,” Wiegand said in 2017. “This connectivity is going to be a huge benefit to society but also economic growth.”
Tencent, Atomico and Obvious were among the investors backing Lilium in its most recent $90 million raise. Sources tell us that Tencent is again in this latest round, and the startup has been pitching potential new investors since at least this spring, visiting with firms in Silicon Valley.
It seems this latest, bigger round has yet to close. The target size implies the involvement of big names, with big funds behind them.
“I sincerely hope they get the funds to transform transportation,” one source said.
When (if) the round closes, it would be the biggest fundraising to date for flying taxis, an area that has lots of potential, but is still far from tested — a fact that one source suggested could contribute to the longer period needed to close the outsized round.
“It’s a known secret how hard it is to raise growth rounds in this space because it’s such a new and untested market,” an executive from another air-taxi startup noted. “Early investments were betting on the market vision and the concept of radically new mobility, but now it’s dawning on investors and others that it’s also a regulation play, and more.” That translates potentially to sustained costs, “and that may be one reason why it’s taking some time.”
Add to that the ambition at hand — designing completely new transportation hardware, then manufacturing the aircraft at scale, and then finally building a transportation, taxi-style service around them — and you can start to see why the round might be very large.
Lilium, Atomico, Tencent and Obvious all declined to comment for this story. We’ll update the post if that changes.
Up, up and away
It’s been a little over two years since Lilium and others in the same space such as Volocopter began publicly discussing their visions for the future of mobility alongside incredibly well-funded industry giants like Uber and established aerospace companies like Airbus, Boeing and others.