The dream of flying taxis just hit a big roadblock. Volocopter, a German company making electric air taxis, has gone bankrupt. Over 10 years, the company raised $544 million from investors like Saudi Crown Prince Mohammed bin Salman, Mercedes-Benz and Intel. However, the company struggled to secure the additional funding needed to stay operational and filed for bankruptcy.
Volocopter's Promising Vision
Founded in 2011, Volocopter has been a leader in urban air mobility (UAM), designing electric vertical takeoff and landing (eVTOL) vehicles aimed at revolutionizing transportation. The company's flagship model, the VoloCity, promised to deliver zero-emission air travel and had made significant progress toward receiving certification from the European Union Aviation Safety Agency (EASA). Volocopter even envisioned launching its commercial services by 2025.
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This vision captured the attention of global investors. Notably, NEOM, Saudi Arabia's $1.5 trillion megacity project, invested $175 million in Volocopter in 2022. NEOM planned to integrate Volocopter's air taxis into its futuristic city design, including routes for The Line, Oxagon and Trojena.
Dirk Hoke, Volocopter's CEO, once described the project as a game-changer: "This is the first time in history that eVTOLs are being factored into the design of a region built from scratch."
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What Went Wrong?
Despite its ambitious goals, Volocopter's financial troubles began to surface as it faced rising costs and funding challenges. The company's bankruptcy filing at the Karlsruhe Local Court in December 2024 starkly acknowledged these issues. Volocopter cited difficulties raising sufficient capital to sustain operations and move toward market entry.
The company's struggles became apparent when it was forced to cancel test flights at the Paris Olympics due to delays in aircraft engine certification. While Volocopter claimed it had completed 75% of the EASA certification process for the VoloCity, the lack of fresh capital left it unable to cross the finish line.
High-Profile Backers
Over its 13-year journey, Volocopter raised a total of $544 million through seven funding rounds and major investors included:
- Mercedes-Benz (Series B, €30.2 million)
- BlackRock (Series D, €200.9 million)
- NEOM (Series E, $175 million)
- Microsoft, Intel and Honeywell Ventures
Despite these contributions, Volocopter's burn rate, though reportedly one of the lowest in the industry, could not overcome the high costs of developing and certifying its eVTOL technology.
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NEOM's Investment and Saudi Crown Prince MBS's Vision
For NEOM, Volocopter was supposed to be a big part of its zero-emissions transportation plan. NEOM's CEO, Nadhmi Al-Nasr, said the partnership would help bring air taxis to daily life. He believed Volocopter's work supported Saudi Arabia's goals for a cleaner, greener future.
But now, with Volocopter filing for bankruptcy, NEOM's plans for air taxis might face delays. The city could have to look for new partners or solutions.
Volocopter remains optimistic about finding investors and restructuring. Provisional insolvency administrator Tobias Wahl has initiated efforts to attract new funding, aiming to finalize a restructuring plan by February 2025. Volocopter also insists that its business operations will continue during this period.
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