REVOLUTION.AERO • CONFERENCE REPORT
Revolution.Aero conference
OEMs, investors and analysts took centre stage at our London conference in June. Words: Yves Le Marquand
Vertical's CTO Michael Cervenka provided insight on what it means to be a leading eVTOL developer based in the UK.
REVOLUTION.AERO • CONFERENCE REPORT
Revolution.Aero conference
OEMs, investors and analysts took centre stage at our London conference in June. Words: Yves Le Marquand
Vertical's CTO Michael Cervenka provided insight on what it means to be a leading eVTOL developer based in the UK.
SUMMER CAN be a fleeting season in London. While sunny weather greeted our conference in the capital, the mood inside was a little less sunny than at previous events. A cold funding climate, the advanced air mobility (AAM) winter and the industry’s position in the hype cycle were all high on the agenda.
AAM remains by far the biggest draw for investment. Joshua Ng, director at Alton Aviation Consultancy provided a granular look at the funding the market has attracted. “I think we can all agree that now is time that is characterised by a lot of investments. But where has all of it gone? There has been $12bn invested in this sector and 85% of it has gone to OEMs. This number also excludes Airbus, Leonardo and Textron that are all investing their own money.”
But he added: “There is still a lot of money that needs to be raised to bring a lot of these vehicles to market.”
The reality of the costs and regulatory hurdles associated with commercialising a clean-sheet aircraft programme is settling in for many, according to Sergio Cecutta, founder, SMG Consulting. Speaking on the panel Where are we in the hype cycle?, Cecutta said: “Right now, we are in the reality part of the hype cycle. It is a double-edged sword. One piece is the fact these aircraft are hard to develop, especially to certify. The other is that it takes a lot of money. Not $1bn, but $1.5bn to $2bn.”
“There is an under appreciation of the risk a tier one may be taking on. The expectation from founders is that the business plan is the reality, when in actuality it’s a forecast.”
Sara Jones, head of aerospace investing at Honeywell’s venture arm.
Raise your hand if your travel here involved delays!
Catherine Kolimas Schorm joined us for the panel Venturing beyond early stage investment.
“Recognise change and translate that into new business opportunities,” says Kolin Schunck from Lufthansa's Innovation Hub.
Alton Aviation's Joshua Ng highlighted just how much investment eVTOLs have attracted versus other areas of this latest revolution in aviation.
The OEM perspective
The sustainable aviation industry needs to work together to ensure it is not excluded from the transport ecosystem, Yesh Premkumar, senior lead, Global Partnership and Business Development at Supernal told delegates.
“When thinking about sustainability, what is in the air must mirror what is on the ground. So sustainable aviation becomes part of sustainable mobility and infrastructure. We have to make a conscious effort to integrate aviation into the general mobility infrastructure. That is the reason why we were created as part of Hyundai,” he said.
Premkumar also pointed out that the top four automotive OEMs globally – VW, Stellantis, Toyota and Hyundai – all have investments in AAM. “Which is fascinating,” he said, and potentially points toward increasing integration.
Stellantis’ AAM play is with Archer. The eVTOL aircraft developer’s chief commercial officer Nikhil Goel discussed recent progress and international strategy.
“The vast majority of the UAM market is going to be outside the United States,” said Goel. “That’s where all the population growth is happening. In cities where there is not enough space to build roads. I’ve been in this industry for a decade, this is what I’m really excited about. How do you make those cities smarter, better, more efficient places to live?”
The eVTOL aircraft developer has announced plans to launch services in the UAE, Korea and India. In the latter it is working with Indigo, India’s largest and the world’s third largest airline, to bring air taxi services to Delhi, Mumbai and Bangalore.
“The vast majority of the UAM market is going to be outside the United States.”
Nikhil Goel, chief commercial officer, Archer Aviation
“The vast majority of the UAM market is going to be outside the United States.”
Nikhil Goel, chief commercial officer, Archer Aviation
Down and out?
Consolidation has been coming up more and more. Revolution.Aero predicted in January that the industry would see more consolidation this year. Since the conference took place, the industry has seen the closure of Universal Hydrogen, a hydrogen propulsion startup that had raised nearly $100m. It remains to be seen who, if anyone, will buy its intellectual property (IP).
According to Brian Flynn, founding partner at DiamondStream Partners, he is seeing two types of deals this year. “One is where the company is performing well according to their targets and those companies are finding the funding that creates attractive valuations,” he said. “The other type of deal is restructurings and those are more fraught with peril at any valuation.”
Bristow’s Dave Stepanek, fresh from the publication of his white paper A Philosophical Guide to AAM, was keen to stress his optimism for the opportunity that AAM presents. But it will take time to fully realise that potential, he acknowledged.
“If you got on an airplane to get here today, you were benefiting from 120 years of operations and evolution of safety,” Stepanek told delegates. “Even today with advanced aircraft in Part 121 world, we are still seeing evolutionary problems. That is what we need to focus on.
“How do we take this revolutionary technology and apply evolutionary learnings?”
Cargo delivery
Bristow believes, along with many others, that cargo will come first. The sector offers multiple opportunities for different aircraft. Last mile, middle market and regional turboprop replacement.
Speaking on the panel Ready, set, (car)go! was Tom Plümmer, CEO of German drone delivery startup Wingcopter. The firm went back to the drawing board after realising a single point of failure in the system was not scalable. Now having tested in Germany, USA, Japan and Spain, Wingcopter is readying to bring its new aircraft online imminently.
The company, which covers last-mile operations, has raised over $100m but getting there was not easy. “Either you make revenue and you get an investment. Or you don’t. So, we had to bootstrap for four years, we sold the system, employed people; made a few million in revenue. Then we got investment,” said Plümmer.
Data-use challenges
Growing a new sector inevitably throws up unprecedented hurdles. One such challenge arises in the deployment of AI systems in aviation and the legal challenges around data use, according to Ben Woodfield, senior associate at law firm Bird & Bird.
“Whether you’re a customer, supplier or investor, the takeaway message is that we are not just talking about rights in IP here. We are talking about rights in data, and you need to think through the data part, just as much as you think through the IP part,” concluded Woodfield.
The saying goes you can have data with no information, but you can’t have information with no data. The more industry data collected and shared, the more it can be applied to produce results.
Brian Flynn, DiamondStream Partners, is seeing two types of deals in 2024, and they have big impacts on valuation.
RevAero Audience Votes
Step into virtual reality to see what a founder envisions.
Wingcopter's Tom Plümmer knows just how much work it takes to attract investment, the firm had to bootstrap for four years.
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Revolution.Aero, San Francisco • 4th & 5th December 2024
The next Revolution.Aero is coming up this December 4th and 5th. Before you say we changed the dates to the festive period to brighten up the mood, that isn’t true (although many of us are cheerier around Christmas). So far, through the second half of this year we have seen further significant investments in Archer and Joby, the deployment of drone delivery networks in Silicon Valley for the first time and beyond visual line of sight authorisations of more than 310 miles (500km) in Australia. Plus 2025 is the year marked for the first FAA type certification of an eVTOL. We look forward to seeing you in the City by the Bay.
