Vertical Completes eVTOL Prototype, Adds Funds
Vertical Aerospace has secured a $100 million funding line to bolster its finances as the UK startup ramps up spending on development of its VX4 electric vertical takeoff and landing (eVTOL) air taxi.
Bristol-based Vertical ended the first half of 2022 with £158 million ($190 million) cash in hand, having raised $300 million in December 2021 through its going-public merger with blank-check company Broadstone Acquisition. This is less cash than any of the UK startup’s rival publicly traded eVTOL developers had in hand by midyear.
Vertical saw its research and development expenses increase to $19.4 million in the first half of 2022 versus $7.5 million for the same period last year as it completed the build of its full-scale technology demonstrator. The startup expects its cash burn in the second half of the year to be £40-50 million.
To bolster its finances, Vertical has established an equity subscription line with Japan’s Nomura Securities International which will allow the startup to issue up to $100 million in new shares. “This facility is intended to provide flexibility around the timing of issuing new stock to minimize dilution,” Vertical said in a Aug. 8 shareholders’ letter.
Despite having less cash than its rivals, the startup said the £158 million in hand at the end of July will “enable Vertical to fund its operating expenses and capital expenditure requirements for at least the next 12 months.” Vertical is aiming to complete certification and begin production of the VX4 in 2025 and holds letters of intent for more than 1,400 aircraft.
Part of Vertical’s funding plan involves securing down payments from customers. In July, the company received its first such commitment from American Airlines to make a predelivery payment to secure delivery slots for the first 50 VX4s from its conditional preorder of up to 250 aircraft. The airline also has an option to purchase an additional 100 aircraft.