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Eve’s first completed full-scale prototype is expected to be finished in time for flight testing during the second half of this year.
Embraer spinoff Eve Air Mobility has secured a further $94 million in equity financing from multiple investors, including its largest existing shareholders, bolstering its financial runway at a time when many advanced air mobility (AAM) players are struggling to raise capital.
The $94 million in new equity, to be raised through an upcoming private placement, includes the issuance of $30 million in new shares and warrants to Embraer, and $20 million of shares and warrants to Nidec, which supplies the electric propulsion system for Eve’s aircraft via a joint venture with Embraer. The remaining investors were not identified by Eve.
Eve said the equity round is expected to close “in the coming weeks.”
“We appreciate the confidence that these investors are placing in Eve. The new equity, along with existing cash and credit lines, ensures Eve is well positioned as we continue to build momentum and advance in the development and manufacturing of our eVTOL [electric vertical-takeoff-and-landing vehicle],” Eve’s Chief Financial Officer Eduardo Couto said in a statement.
The company ended the first quarter of 2024 with $280 million in liquidity, including the undrawn portions of loans from the Brazilian National Development Bank, which it said at the time would be enough to sustain its operations “well into 2025.”
The proceeds from the latest round represent less than a year of new funding for Eve, which spent approximately $36 million in the first quarter.
Speaking to the AAM Report following the capital raise announcement, SMG Consulting analyst Sergio Cecutta observes that Eve’s strong backing from Embraer “puts them in a different category [among eVTOL startups] where funding is not that big of an issue.”
He also observes that Eve benefits from substantially lower production costs in Brazil compared to rivals in Europe and the U.S.
While many AAM startups have struggled to raise funds in recent months, leading startups have had some success raising capital from existing shareholders. In addition to Eve, Lilium and Volocopter have both announced successful raises in recent months.
But for the multitudes of startups that do not enjoy the backing of large corporate entities and institutional investors, the negative capital market environment toward AAM could mean that more startups will have to wind down operations, similar to the plans announced by Universal Hydrogen over the weekend.
“Right now, the money is going to the people who already have the money,” Cecutta says. “My concern is the companies that are in the second wave, or those that have raised double-digit millions of dollars. I’m worried that some of these companies might reach the end of their financial runway when it comes to funding.”
The latest capital raise comes as Eve works to complete its first full-scale prototype ahead of flight testing planned for the second half of 2024. Eve has said it plans to type certify its aircraft in time to launch service in 2027.
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