Horizon Aircraft has revealed that around $900 million was invested in the urban air mobility market in the first six months of 2020, but new research with senior private equity and venture capital professionals reveals 59% expect over $2 billion will be invested in the sector this year. Some 41% predict the figure will be over $3 billion, and 16% think it will be more than $4 billion.
According to Horizon Aircraft, the findings also reveal that over the next three years, 62% of private equity and venture capital professionals expect to see an increased use in SPACs (special purpose acquisition companies), to buy, invest or raise funds for eVTOL companies. A SPAC is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company.
| How much do you think will be invested in the urban air mobility market in 2021 | Percentage of private equity and venture capital professionals who predict this |
| Around $1 billion | 19% |
| Between $1 billion and $2 billion | 17% |
| Between $2 billion and $3 billion | 18% |
| Between $3 billion and $4 billion | 25% |
| Between $4 billion and $5 billion | 12% |
| Over $5 billion | 4% |
| Don’t know | 5% |
When asked what they think are the three main reasons why the level of investment in the eVTOL market is increasing, 64% of private equity and venture capital professionals highlight the fact that more large corporations have entered the sector, providing greater confidence around its prospects.
This was followed by 58% who cite more M&A activity in the sector, and the listing of eVTOL companies with attractive valuations, and the third most popular key reason highlighted by 37% of survey respondents is growing public confidence in the market.
| Reason for growing investment in the eVTOL market | Percentage of private equity and venture capital professionals who chose this as one of their three key reasons as to why investment in the eVTOL sector is increasing |
| More large companies investing in the sector/providing greater market confidence | 64% |
| Growing M&A activity in the sector/listing of eVTOL companies with attractive valuations | 58% |
| Public confidence in the eVTOL market is growing | 37% |
| Problems of growing congestion and urbanisation are becoming bigger | 36% |
| Desire from people to save time will increase | 31% |
| Development schedules from a growing number of eVTOL companies are on track/sector is meeting more milestones | 29% |
| Growing number of eVTOL companies/more to invest in | 26% |
| Technological developments in the sector | 13% |
Brandon Robinson, CEO and Co-Founder of Horizon Aircraft, said: “The eVTOL market is predicted to enjoy rapid growth over the next few years, and by 2050 there could be 160,000 commercial air taxis or more operating around the world, generating over $90 billion a year in revenue(1). This coupled with the fact that the sector is incredibly dynamic and fast moving, means it is attracting a huge amount of interest from investors. We expect this trend to continue.”
Horizon Aircraft stated that on 18th February 2021, Astro Aerospace (OTCQB: ASDN), a global leader in eVTOL aerial vehicles and drones, entered a binding agreement to acquire Horizon Aircraft Inc. The transaction is expected to close on or before the beginning of 2nd Quarter pending customary closing conditions.
Astro, a pioneer in the eVTOL market, has developed one of the market’s safest and most efficient eVTOLs in the world. In 2018, the Company’s drone, ‘Elroy’, was one of the first to seamlessly fly with humans on board. Astro continually defies traditional aviation design, and the acquisition of Horizon will only push the Company further, with the ability to reach greater heights working in tandem with Horizon’s exceptional team.