Volocopter, a leading developer in the electric vertical takeoff and landing (eVTOL) sector, is currently navigating financial turbulence as it seeks new investors to avoid potential insolvency. CEO Dirk Hoke recently disclosed that the company might need to consider insolvency options following unsuccessful attempts to secure essential loans from the Baden-Württemberg and Bavarian states to advance its electric aircraft development.
"The fundraising environment has been challenging in recent years," Hoke stated. "While the German federal government has been supportive, offering a convertible loan, the overall mechanisms in Germany to support late-stage startups are limited."
Volocopter's initial attempt to obtain a €100 million loan, shared equally between Baden-Württemberg and the federal government, was unsuccessful. Subsequently, the company applied for another €100 million convertible loan from Bavaria. However, one stipulation for the Bavarian loan was relocating the company’s headquarters from Bruchsal in Baden-Württemberg to Bavaria—a move that would need to be phased due to logistical challenges involving over 600 employees.
A spokesperson for Volocopter emphasized the strong federal support for the loan, highlighting its potential to position Germany as a leader in the eVTOL industry. Despite a positive economic feasibility study by PwC, the Bavarian state deemed the loan too risky.
Volocopter's financial difficulties illustrate broader funding challenges within the eVTOL sector. The company has faced ongoing legal disputes with early investors and missed out on public funding opportunities that benefited competitors like Archer, Joby, and Lilium. In late 2021, Volocopter withdrew from a planned merger with a special purpose acquisition company (SPAC) due to unfavorable market conditions for such transactions.
The company has criticized the lack of financial support for late-stage startups in Germany and Europe, pointing to successful initiatives like the U.S. AFWERX Agility Prime program and Chinese incentives for advanced air mobility (AAM) development.
Despite these obstacles, Hoke mentioned that Volocopter is in "good discussions with existing and new investors for alternative financing," looking beyond Europe for potential backers. The company boasts a diverse international investor base, including Saudi Arabian organization Neom, Chinese car manufacturer Geely, South Korean investor WP Investment, Italy-based Atlantia SpA, and Tokyo Century.
Volocopter remains committed to debuting its VoloCity eVTOL aircraft at the Paris Summer Olympics, aiming to showcase its capabilities and achieve EASA certification despite financial setbacks.
Contrasting with some international peers, Volocopter has established its production facilities without government funding, underscoring its resilience and dedication to innovation in urban air mobility.
