Joby Aviation raises $590 million led by Toyota to launch an electric air taxi service

Joby Aviation has raised a $590 million Series C round of funding, including $394 million from lead investor Toyota Motor Corporation, the company announced today. Joby is in the process of developing an electric air taxi service, which will make use of in-house developed electric vertical take-off and landing (eVTOL) aircraft that will in part benefit from strategic partner Toyota’s vehicle manufacturing experience.

This brings the total number of funding in Joby Aviation to $720 million, and its list of investors includes Intel Capital, JetBlue Technology Ventures, Toyota AI Ventures and more. Alongside this new round of funding, Joby gains a new board member: Toyota Motor Corporation EVP Shigeki Tomoyama.

Founded in 2009, Joby Aviation is based in Santa Cruz, California. The company was founded by JoeBen Bevirt, who also founded consumer photo and electronics accessory maker Joby. Its proprietary aircraft is a piloted eVTOL, which can fly at up to 200 miles per hour for a total distance of over 150 miles on a single charge. Because it uses an electric drivetrain and multi rotor design, Joby Aviation says it’s “100 times quieter than conventional aircraft during takeoff and landing, and near-silent when flying overhead.”

These benefits make eVTOL craft prime candidates for developing urban aerial transportation networks, and a number of companies, including Joby as well as China’s EHang, Airbus and more are all working on this type of craft for use in this kind of city-based short-hop transit for both people and cargo.

The sizeable investment made by Toyota in this round is a considerable bet for the automaker on the future of air transportation. In a press release detailing the round, Toyota President and CEO Akio Toyoda indicated that the company is serious about eVTOLs and air transport in general.

“Air transportation has been a long-term goal for Toyota, and while we continue our work in the automobile business, this agreement sets our sights to the sky,” Toyoda is quoted as saying. “As we take up the challenge of air transportation together with Joby, an innovator in the emerging eVTOL space, we tap the potential to revolutionize future transportation and life. Through this new and exciting endeavor, we hope to deliver freedom of movement and enjoyment to customers everywhere, on land, and now, in the sky.”

Joby Aviation believes that it can achieve significant cost benefits vs. traditional helicopters for short aerial flights, eventually lowering costs through maximizing utilization and fuel savings to the point where it can be “accessible to everyone.” To date, Joby has completed sub-scale testing on its aircraft design, and begun full flight tests of production prototypes, along with beginning the certification process for its aircraft with the Federal Aviation Administration (FAA) at the end of 2018.

Air taxi company EHang flies autonomously in the U.S. for the first time

Aerial passenger drone startup EHang flew its EHang 216 two-seat self-flying taxi fully autonomously in North Carolina last night, a first for the company both in the U.S. and North America. EHang, which is based in Guangzhou, China, has already demonstrated its vehicle in flight both at home, and in different parts of Europe and Asia, but this is the first time its aircraft has received approval to fly by the FAA, and EHang is now working towards extending that approval to flying with passengers on board which is a key requirement for EHang’s eventual goals of offering commercial service in the U.S.

This demonstration flight, which took place in Raleigh, included flying North Carolina governor Roy Cooper on board the two-seat aircraft. Eventually, EHang hopes to deploy these for use across a number of different industries, for transportation of both passengers and cargo along autonomous, short-distance routes in and around urban areas.

EHang had a busy 2019, too – the company began trading publicly on the Nasdaq in December. It also revealed plans to begin operating an aerial shuttle service in Guangzhou, with a pilot citywide drone taxi service intended to show off not only its individual autonomous vehicle capabilities, but also how it can deploy and operate multiple EHang aircraft working in concert with one another and with other aircraft sharing the air space over the city.

Towards the end of 2019, EHang actually completed two trial flights of its 216 vehicles flying simultaneously as an early step towards building out that pilot. The company has already delivered around 40 of its aircraft to paying customers, too, and if all goes to plan, by next month it will have completed a pilot program with the Civil Aviation Administration of China that will allow it to move on to full approval of the airworthiness of its aircraft in the country for commercial flight.

Hardware IPOs continue to struggle

Now that the final technology IPOs of 2019 have touched down, it’s a good time to start looking back at what happened during the year. We’re hunting for trends as the clock winds down. Here’s one that’s obvious: Hardware startups are still struggling.

It’s cliché to note in startupland that hardware is hard. Everyone knows it. Making hardware is difficult by itself, but as all tech hardware requires software, hardware shops wind up needing wider domain expertise than pure-software startups. And that’s hard.

But even if a nuts-and-bolts tech company hits scale, it seems difficult to keep that momentum up.

This year we saw Peloton, a hybrid hardware and digital services company go public and struggle. Despite a recent public market resurgence, the company is slipping back towards its IPO price. Today its equity is trading down about 6 percent to around $30 per share. The company’s IPO price of $29 is uncomfortably close to its current value.

2019’s IPO crop also included EHang, a late-entry to the market (more here on its debut) that quickly began to lose altitude after it started to float. EHang traded up today, but the firm is still worth less than its IPO valuation, a reduced figure that was dinged during the China-based drone company’s march towards the public markets.

So, Peloton is about flat and EHang is down. That’s not a great mix of results for a year’s IPO class of hardware companies. Looking back in time, things don’t get much better.

NIO, a China-based electric car company (despite making this thing of beauty) has deleted about two-thirds of its value since its late-2018 US-listed IPO. After going public at $6.25, shares of NIO are worth just $2.70 today.

Sonos also went public in the United States in 2018. It traded above its IPO price of $15 at first. Then it fell under $10 per share as 2018 came to a close. The smart speaker and stereo company spent 2019 recovering. It’s now worth its IPO price again, closing trading today worth about $14.80 per share.

If you go back to 2017, however, Roku has kicked ass. After pricing at $14 per share, the TV hardware and digital services firm is trading for $137 per share, a nearly 10x gain. But Roku was moving away from hardware at the time of its IPO, making it a somewhat poor example. Hardware revenues for Roku were just 31% of revenue in its most recent quarter, for example. That figure was 42% in the year-ago quarter. It will continue to fall.

We don’t need to go over what happened to Fitbit and GoPro, I don’t think.

Hardware can make a lot of money. Samsung and Apple make oceans of money from their hardware. Microsoft has managed to make Surface into a real business, with billions of dollars in yearly revenue. Amazon has a big hardware business with both consumer reading gadgets and consumer surveillance devices. Even Google is taking its new phone seriously enough to buy out a chunk of the NBA’s ad slots (I think it’s this one), according to my extensive in-market testing. Facebook is the laggard of the group.

But for smaller hardware companies going public, unless I’m missing a number of recent of IPOs and I don’t think that I am, it’s a tough world out there.

Grading the final tech IPOs of 2019

As the holiday slowdown looms, the final U.S.-listed technology IPOs have come in and begun to trade.

Three tech, tech-ish or venture-backed companies went public this week: Bill.com, Sprout Social and EHang. Let’s quickly review how each has performed thus far. These are, bear in mind, the last IPOs of the year that we care about, pending something incredible happening. 2020 will bring all sorts of fun, but, for this time ’round the sun, we’re done.

Pricing

Our three companies managed to each price differently. So, we have some variety to discuss. Here’s how each managed during their IPO run:

How do those results stack up against their final private valuations? Doing the best we can, here’s how they compare:

So EHang priced low and its IPO is hard to vet, as we’re guessing at its final private worth. We’ll give it a passing grade. Sprout Social priced mid-range, and managed a slight valuation bump. We can give that a B, or B+. Bill.com managed to price above its raised range, boosting its valuation sharply in the process. That’s worth an A.

Performance

Trading just wrapped, so how have our companies performed thus far in their nascent lives as public companies? Here’s the scorecard:

  • EHang’s Friday closing price: $12.90 (+3.2%)
  • Sprout Social’s Friday closing price: $16.60 (-2.35%)
  • Bill.com’s Friday closing price: $38.83 (+76.5%)

You can gist out the grades somewhat easily here, with one caveat. The Bill.com IPO’s massive early success has caused the usual complaints that the firm was underpriced by its bankers, and was thus robbed to some degree. This argument makes the assumption that the public market’s initial pricing of the company once it began trading is reasonable (maybe!) and that the company in question could have captured most or all of that value (maybe!).

Bill.com’s CEO’s reaction to the matter puts a new spin on it, but you should at least know that the week’s most successful IPO has attracted criticism for being too successful. So forget any chance of an A+.

Image via Getty Images / Somyot Techapuwapat / EyeEm

EHang, maker of autonomous flying shuttles, files for $100 million IPO

Chinese autonomous air mobility company EHang has filed with the SEC the paperwork required to go public in the U.S. on the NASDAQ exchange, with a $100 million initial public offering. The company, which has been flying demonstration flights with passengers on board for a while now, is gearing up to launch its first commercial service in Guangzhou after getting approval from local and national regulators to deploy its drones in the area.

At launch, EHang will be using its two-seater vertical take-off and landing craft (VTOL), which has room for two passengers on board. EHang doesn’t just build the aircraft, though – its goal is to build full, multi-aircraft (as many as ‘thousands,’ according to Forbes) autonomous transportation networks that it hopes will serve to alleviate and avoid congested ground traffic. Guangzhou, with an estimated population of over 13 million, suffers from considerable traffic.

EHang is also building out logistics and cargo transportation capabilities as well as passenger services. The company believes it can offers short designate cross-city transportation that can cut down on time by as much as 40 to 60 percent, and once it achieves scale, it also says that costs have the potential to be reduced by as much as 50 percent.

Founded in 2014, EHang last announced funding in 2015, when It raised $42 million in a Series B round led by GP Capital, with GGV Capital, ZhenFund, Lebox Capital, OFC and PreAngel also participating.

Sources: Lilium is looking to raise up to $500M for its electric flying taxis

“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 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 e24, a fund from Christian Reber (co-founder of Wunderlist and now Pitch), have also backed it, among others.

In all, Lilium has raised over $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, that would make it 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.

Lilium raised its first round of funding in December 2016 and only a few months later, Uber convened its first Elevate conference, which included discussions on the transportation industry’s flying future.

Since those initial discussions, the companies developing technologies and services to bring those plans to fruition have made significant strides.

Earlier this year Lilium announced the first successful flight for a new five-seat electric vertical take-off and landing (VTOL) vehicle. Others are readying pilot projects in their first launch cities, with the timeline for first full-launch services currently hovering around the three-year mark from now (note: dates do get pushed back).

For Lilium and its competitors, the development of completely new, air-borne vehicles are a means to solving a specific problem: roads in and between cities are too congested with traffic; and electric, air-based options can be a way to offset that situation in an environmentally-friendly way.

Many companies building these new craft are considering taxi-style services as the first or primary point of market entry because — similar to fully-autonomous cars — the cost per vehicle will likely be too high for most individuals to consider buying for private/sole use, notwithstanding the safety features of being able to manage a full fleet autonomously that would be harder to execute with single users (who would have to be pilots, in the case of flying cars).

Lilium’s new vehicle claims to have a top speed of 300 kilometers per hour and a 300 kilometer range, which would make it capable of covering longer distances than its competitors. Lilium says this is partly because it’s designed it in the form of a small jet aircraft instead of mimicking the mechanics and form factor of drones or helicopters (the latter is the approach that Volocopter, another startup out of Germany backed by the likes of Intel and Daimler, is taking). The fixed-wing design of the plane means that it can rely on lift to stay aloft, cutting down on the power demands on the electric 2,000 horsepower engines when it’s aloft.

“This efficiency, which is comparable to the energy usage of an electric car over the same distance, means the aircraft would not just be capable of connecting suburbs to city centres and airports to main train stations, but would also deliver affordable high-speed connections across entire regions,” Lilium said in a statement at the time.

But physics is just one part of the complex system of moving pieces that would need to come together to get Lilium (or any of its rivals) off the ground.

For one, any system will need to integrate with existing air traffic control infrastructure as well — as local and national regulators grapple with increasingly crowded skies.

Another involves the logistical components to operate a service. The company also established a software engineering base in London to help build out the fleet management software and mobile phone application that will connect customers to the jets for transit, and it has been hiring.

Although we have yet to see any commercial services emerge built on the concept of fleets of providing short/medium-distance, air-based taxi-style transportation, there are a number of hopefuls that have identified the opportunity of both designing aircraft and building services around them.

Companies like Kitty HawkeHang, Joby and Uber all hope to play a role in offering short-range flights as an affordable alternative to road-based transportation. (Blade and SkyRyse, two other air taxi services of sorts, are offering more conventional helicopters and other vessels in limited launches for well-heeled travelers willing to spend the money.)

Last week at San Francisco Disrupt 2019, Kitty Hawk announced its latest vehicle, Heaviside. It’s an electric aircraft designed to be a personalised vehicle, less obtrusive than a helicopter, ableto go anywhere and land anywhere fast and quietly, and as easy to operate as “pushing a button,” according to CEO Sebastian Thrun.

Autonomous air mobility company EHang to deploy air shuttle service in Guangzhou

China’s EHang, a company focused on developing and deploying autonomous passenger and freight low-altitude vehicles, will build out its first operational network of air taxis and transports in Guangzhou. The company announced that the Chinese city would play host to its pilot location for a citywide deployment.

The pilot will focus on not only showing that a low-altitude, rotor-powered aircraft makes sense for use in cities, but that a whole network of them can operate autonomously in concert, controlled and monitored by a central traffic management hub that Ehang will develop together with the local Guangzhou government.

Ehang, which was chosen at the beginning of this year by China’s Civil Aviation Administration as the sole pilot company to be able to build out autonomous flying passenger vehicle services, has already demonstrated flights of its Ehang 184 vehicles carrying passengers in Vienna earlier this year, and ran a number of flights in Guangzhou in 2018 as well.

In addition to developing the air traffic control system to ensure that these operate safely as a fleet working in the air above city at the same time, Ehang will be working with Guangzhou to build out the infrastructure needed to operate the network. The plan for the pilot is to use the initial stages to continue to test out the vehicles, as well as the vertiports it’ll need to support their operation, and then it’ll work with commercial partners for good transportation first.

The benefits of such a network will be especially valuable for cities like Guangzhou, where rapid growth has led to plenty of traffic and high density at the ground level. It could also potentially have advantages over a network of autonomous cars or wheeled vehicles, since those still have to contend with ground traffic, pedestrians, cyclists and other vehicles in order to operate, while the low-altitude air above a city is more or less unoccupied.