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Urban air mobility market investment to hit $2b

Issac John /Dubai
issacjohn@khaleejtimes.com Filed on April 26, 2021
The research reveals that over the next three years, 62 per cent of private equity and venture capital professionals expect to see an increased use in special purpose acquisition companies, to buy, invest or raise funds for eVTOL companies. — File photo

Around $900 million was invested in the urban air mobility market in the first six months of 2020, but new research with senior private equity and venture capital professionals reveals 59 per cent expect over $2 billion will be invested in the sector this year


Investment in Electric Vertical Take-off and Landing (eVTOL) aerial vehicle technology is expected to hit $2 billion in 2021 with several advanced cities in the world, including Dubai, setting sight on launching air taxi services by next year.

Around $900 million was invested in the urban air mobility market in the first six months of 2020, but new research with senior private equity and venture capital professionals reveals 59 per cent expect over $2 billion will be invested in the sector this year. Some 41 per cent predict the figure will be over $3 billion, and 16 per cent think it will be more than $4 billion, according to a research commissioned by Horizon Aircraft.

Horizon Aircraft is an aerospace engineering company that has developed the Cavorite X5, the world’s first eVTOL (Electric Vertical Take-off and Landing) that can fly the majority of its mission exactly like a normal aircraft.

Dubai’s Roads and Transport Authority (RTA) has made much headway with its Autonomous Air Vehicle Project. In August 2020, RTA signed an agreement with Dubai Air Navigation Services to map out sky lanes for flying taxis and drones across the city. The move is part of Dubai’s Self-Driving Transport Strategy drive that envisions by 2030, 25 per cent of all trips will be fully autonomous.

Brandon Robinson, CEO and co-founder of Horizon Aircraft, said the eVTOL market is predicted to enjoy rapid growth over the next few years.

He said by 2050, there could be 160,000 commercial air taxis or more operating around the world, generating over $90 billion a year in revenue. “This coupled with the fact that the sector is incredibly dynamic and fast moving, means it is attracting a huge amount of interest from investors. We expect this trend to continue.”

The research by Horizon Aircraft also reveals that over the next three years, 62 per cent of private equity and venture capital professionals expect to see an increased use in SPACs (special purpose acquisition companies), to buy, invest or raise funds for eVTOL companies. A SPAC is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company.

Almost 64 per cent of private equity and venture capital professionals who took part in the research highlight the fact that more large corporations have entered the sector, providing greater confidence around its prospects. This was followed by 58 per cent who cite more M&A activity in the sector, and the listing of eVTOL companies with attractive valuations, and the third most popular key reason highlighted by 37 per cent of survey respondents is growing public confidence in the market.

On February 18, 2021, Astro Aerospace, a global leader in eVTOL aerial vehicles and drones, entered a binding agreement to acquire Horizon Aircraft Inc. The transaction is expected to close on or before the beginning of 2nd Quarter pending customary closing conditions.

— issacjohn@khaleejtimes.com

author

Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.





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