Vertical Aerospace founder invests $50M in flying-taxi venture

Vertical Aerospace founder, Stephen Fitzpatrick, has invested $50 million in the flying-taxi venture to ensure its sustainability and success. This cash injection will prevent the company from running out of funds later this year. Fitzpatrick’s investment will be provided in two tranches, with the first $25 million being delivered in March. The remaining amount will be provided by the end of July, depending on the amount of outside capital the firm can raise. Fitzpatrick’s decision to invest in the flying taxi firm demonstrates his confidence in the team and progress made thus far. Without further funding, Vertical Aerospace projected that it would exhaust its cash reserves by September. This investment will now allow the company to seek additional funding at a more favorable valuation in the future.

Introduction

The founder of Vertical Aerospace, Stephen Fitzpatrick, has made a significant investment of $50 million into the flying-taxi venture. This funding comes at a crucial time for the company, as it aims to prevent cash burn and ensure its financial stability. The investment will be provided in two tranches, with the first $25 million being injected in March. The valuation of the company is set at $10 per share, which is well above the current market price. Fitzpatrick’s commitment to the venture demonstrates his belief in the team and the progress they have made.

Funding secured from founder Stephen Fitzpatrick

Stephen Fitzpatrick, the founder of Vertical Aerospace, has provided $50 million in funding for the flying-taxi venture. This investment is aimed at preventing the company from running out of cash later this year. Fitzpatrick’s decision to invest his own money demonstrates his confidence in the future of the venture and his commitment to its success. This funding will help ensure the financial stability of Vertical Aerospace and enable it to overcome potential challenges and risks.

Investment to prevent cash burn

The primary purpose of Stephen Fitzpatrick’s $50 million investment is to prevent cash burn at Vertical Aerospace. Without additional funding, the company projected that it would run out of cash by September. This investment will provide the necessary financial resources to keep the company operational and avoid potential disruptions to its operations. By securing this investment, Vertical Aerospace can focus on its growth and development without being constrained by financial limitations.

Tranche of funding in March

Stephen Fitzpatrick’s investment will be provided in two tranches, with the first $25 million being injected in March. This initial funding will be crucial in addressing the company’s immediate financial needs and ensuring its stability. The valuation of the company at $10 per share demonstrates a strong belief in the potential and value of Vertical Aerospace. This funding tranche will position the company for further growth and development.

Remainder of funding by end of July

In addition to the initial $25 million funding tranche, Stephen Fitzpatrick has committed to providing the remaining $25 million by the end of July. The timing of this additional funding will enable Vertical Aerospace to continue its operations without financial constraints. The amount and pricing of the remaining funding will depend on the company’s ability to secure outside capital. Vertical Aerospace will actively seek further funding to support its growth and expansion plans.

Value of company at $10 per share

The valuation of Vertical Aerospace at $10 per share highlights the confidence Stephen Fitzpatrick has in the company’s potential and value. This valuation is well above the current market price, indicating that the market may not fully recognize the true worth of the company. By investing at this valuation, Fitzpatrick is positioning Vertical Aerospace for future success and growth. It also reflects his belief in the team and progress they have made thus far.

Huge opportunity seen by Fitzpatrick

Stephen Fitzpatrick sees a significant opportunity in the flying-taxi venture, which has driven his decision to invest $50 million in Vertical Aerospace. Despite acknowledging the execution risks associated with technological development, Fitzpatrick believes in the team and progress they have made. This investment demonstrates his confidence in the future success of the company and his commitment to seeing it through.

Execution risks acknowledged

While Stephen Fitzpatrick acknowledges the execution risks involved in the development of new technologies, he remains optimistic about the future of Vertical Aerospace. The company operates in the capital-intensive industry of electric vertical take-off and landing vehicles (eVTOL), which comes with its own set of challenges and obstacles. However, Fitzpatrick believes that by managing and overcoming these risks, Vertical Aerospace can position itself as a leader in the industry.

Belief in the team and progress

Stephen Fitzpatrick’s investment in Vertical Aerospace is a testament to his belief in the team and the progress they have made. He sees the potential for the flying-taxi venture and is willing to back it with his own funds. By investing $50 million, Fitzpatrick demonstrates his confidence in the capabilities of the team and their ability to navigate the challenges ahead. This investment will provide the necessary resources to drive further progress and development.

Funding needed to avoid cash burn

The investment from Stephen Fitzpatrick is crucial for Vertical Aerospace to avoid cash burn. Without additional funding, the company projected that it would run out of cash by September. Fitzpatrick’s investment will ensure the company’s financial stability and provide the necessary resources to sustain its operations. By securing this funding, Vertical Aerospace can continue to focus on its growth and development without the risk of financial constraints.

Collapse of talks with investors

Vertical Aerospace had previously engaged in talks with investors for a fresh financing round. However, these discussions collapsed due to Stephen Fitzpatrick’s concern that his holding would be diluted too much at the current share price. The collapse of these talks highlighted the importance of securing alternative funding sources to sustain the company’s operations. Fitzpatrick’s investment alleviates the need to rely solely on external investors, ensuring that Vertical Aerospace can remain operational and pursue its growth plans.

Vertical Aerospace in the eVTOL race

Vertical Aerospace is one of several companies competing in the capital-intensive race to develop electric vertical take-off and landing vehicles (eVTOL). These vehicles have the potential to revolutionize the transportation industry by providing efficient and sustainable urban air mobility solutions. By securing funding from Stephen Fitzpatrick, Vertical Aerospace enhances its position in this competitive race and strengthens its ability to bring its flying-taxi venture to market.

Prototype crash and missed funding target

Vertical Aerospace faced setbacks when its prototype VX4 aircraft crashed during an unmanned test flight in August. This incident not only raised safety concerns but also impacted the company’s progress and ability to attract funding. Vertical Aerospace also missed its target to raise fresh funding by December, further exacerbating its financial challenges. However, the investment from Stephen Fitzpatrick provides a lifeline for the company and allows it to continue its development efforts.

Funding to last until Q2 2025

Stephen Fitzpatrick’s $50 million investment is expected to provide sufficient funding for Vertical Aerospace until the second quarter of 2025. This funding will not only support the company’s ongoing operations but also allow it to pursue its growth and expansion plans. By ensuring its financial stability, Vertical Aerospace can focus on further advancing its technology and bringing its flying-taxi venture closer to commercialization.

Seeking further funding at favorable valuation

The investment from Stephen Fitzpatrick positions Vertical Aerospace to seek further funding at a more favorable valuation in the future. By demonstrating his commitment and confidence in the company, Fitzpatrick enhances its attractiveness to potential investors. This improved valuation will enable Vertical Aerospace to secure the necessary capital for its growth plans, ensuring a stronger financial foundation and increased prospects for success.

Importance of agreement with Fitzpatrick

Vertical Aerospace emphasizes the significance of its agreement with founder Stephen Fitzpatrick. The timing of this investment comes as the company nears the completion of a second-generation, piloted VX4 prototype. Fitzpatrick’s financial backing not only provides the necessary resources but also showcases his continued belief in the company’s potential. The agreement serves as a vote of confidence, reinforcing Vertical Aerospace’s position in the market and its ability to drive innovation in the flying-taxi industry.

Second generation, piloted prototype nearing completion

Vertical Aerospace is making significant progress with the development of its second-generation, piloted VX4 prototype. As the company approaches the completion of this prototype, the investment from Stephen Fitzpatrick strengthens its ability to bring this innovative technology to market. The piloted prototype represents a crucial milestone in the company’s journey towards commercializing its flying-taxi venture.

Previous funding from investors and SPAC listing

Vertical Aerospace has previously raised funds from investors, including Mudrick Capital Management and Kouros SA. Additionally, the company went public through a Special Purpose Acquisition Company (SPAC) listing in 2021. However, the timing of its listing was challenging, as it coincided with a decline in investor interest in SPACs. Furthermore, Vertical Aerospace’s prototype crash and missed funding target reduced investor confidence. Despite these challenges, the investment from Stephen Fitzpatrick demonstrates continued support for the company’s vision and potential.

Shares plunge and potential NYSE removal

Vertical Aerospace’s shares experienced a significant decline of 80% during the past year. As a result, the company’s market value currently stands at approximately $130 million. The decline in share price has raised concerns, leading the New York Stock Exchange to issue a warning that Vertical Aerospace could be removed from the exchange unless the shares trade above $1 for a 30-day period in the next six months. The investment from Stephen Fitzpatrick aims to address these concerns and stabilize the company’s stock performance.

Reasons for Fitzpatrick’s investment

Stephen Fitzpatrick’s decision to invest $50 million into Vertical Aerospace is driven by multiple factors. First, he recognizes the huge opportunity in the flying-taxi venture and sees the potential for long-term success. Second, he believes in the team and the progress they have made, instilling confidence in the company’s capabilities. Lastly, Fitzpatrick cites the market’s failure to reflect Vertical Aerospace’s true value as a motivation for his investment. By putting his own money into the company, Fitzpatrick aims to align the market price with the company’s actual worth.

Market price does not reflect company value

Stephen Fitzpatrick has expressed his belief that Vertical Aerospace’s current market price does not accurately reflect the value the company should have. Despite setbacks and challenges, Fitzpatrick sees the potential and future prospects of the flying-taxi venture. By investing $50 million, he intends to bridge the gap between the market price and the true value of Vertical Aerospace, highlighting the underappreciated potential of the company and its technology.

Vertical Aerospace’s stock performance

Vertical Aerospace’s stock performance has faced significant challenges, with a plunge of 80% over the past year. This decline reflects market sentiment and investor concerns regarding the company’s ability to deliver on its promises. However, the investment from Stephen Fitzpatrick signals a renewed confidence in the company’s prospects and may help stabilize and reverse the downward trajectory of its stock price. This investment provides an opportunity for Vertical Aerospace’s stock performance to recover and better reflect its true value.

NY Stock Exchange warning

The decline in Vertical Aerospace’s stock price has triggered a warning from the New York Stock Exchange. The exchange has indicated that unless the company’s shares trade above $1 for a continuous 30-day period within the next six months, there is a risk of removal from the exchange. This warning highlights the urgency for Vertical Aerospace to address its stock performance and attract investors to support its growth and stability.

Conclusion

Stephen Fitzpatrick’s $50 million investment in Vertical Aerospace comes at a crucial time for the flying-taxi venture. This funding will prevent cash burn, ensure the company’s financial stability, and allow it to pursue its growth plans. Fitzpatrick’s belief in the team and the progress they have made demonstrates confidence in Vertical Aerospace’s potential. By securing this significant investment, the company can overcome challenges, seek further funding at a more favorable valuation, and position itself as a leader in the eVTOL industry.