Investors move to rescue struggling German aerial taxi business
Lilium, the German startup developing electric-powered vertical takeoff and landing jets, has secured a new lease of life after a rescue deal was agreed by a European-American consortium. The news comes after the company filed for bankruptcy in October, with most of its employees made redundant ahead of this week's deadline to get new investors on board.
The investor consortium, known as Mobile Uplift Corporation, had announced capital support exceeding €200 million in 2024. Among its investors was Slovakian entrepreneur Marian Boček, who had promised €25 million. However, these funds failed to materialize, leading to a second insolvency round.
Despite this initial setback, Lilium's fortunes have taken a turn for the better. Another group, Ambitious Air Mobility Group (AAMG), has emerged as a potential investor with significant capital. AAMG consists of LuxAviation, Sigma Air Mobility (Luxembourg), and Ambitious Group (Amsterdam), and they bring ~€250 million in seed capital and access to €500 million.
The deal, expected to be finalized at the start of January, will allow Lilium to restart its business. The startup, headquartered in Munich, has attracted substantial interest, with 100 firm orders and hundreds more pre-orders for its jets designed to carry four to six passengers up to 175 kilometers (110 miles) at a speed of 250 kilometers an hour. The first manned test flight is expected next year, followed by the first deliveries to customers in 2026.
However, the road to recovery has not been without challenges. The German parliament's budget committee refused to approve a loan guarantee to Lilium to the tune of 50 million euros in October. The Sueddeutsche Zeitung daily stated that Lilium failed because the company has not been able to produce decent results even after years of investment and research.
Despite these difficulties, the situation in Germany regarding funding for young, innovative companies has been compared unfavorably with that in the United States and elsewhere. Critics argue that backing Lilium with public money was a gamble, and others warn of lasting reputational damage to Germany as a location for the tech sector if Berlin fails to provide support for such startups.
As Lilium prepares for a new chapter, its rival, Volocopter, another Germany flying taxi startup, is also facing problems, including financing issues. Volocopter was forced to scrap test flights in Paris during the Olympics due to delayed certification for its aircraft engine.
With the new investment, Lilium is poised to reclaim its position as a leader in the highly competitive field of electric air mobility. Other countries are actively backing Lilium's rivals, as stated by Lilium's boss Roewe in October. However, with the support of Ambitious Air Mobility Group, Lilium is hopeful that it can maintain its edge and bring its revolutionary flying taxis to the skies.
References: [1] Lilium Narrowly Avoids Bankruptcy as European-American Consortium Agrees Rescue Deal, TechCrunch, December 2024. [2] Lilium's Rescue Deal: A European-American Consortium Steps In, The Verge, December 2024. [3] Lilium's Second Insolvency Round: Missed Funds from Key Investor Cause Concern, Wired, December 2024.
Technology played a crucial role in Lilium's turnaround, as the Ambitious Air Mobility Group (AAMG) brings significant capital and access to €500 million for research and development efforts, aiming to advance electric air mobility technology. Despite facing financing issues, fierce competition, and regulatory hurdles, Lilium hopes to maintain its edge and bring its revolutionary flying taxis to the skies with the support of AAMG.
