Electric Jet Startup Lilium is Merging with a SPAC Run By Former GM Exec
In line with a recent report from Bloomberg, electric jet startup Lilium has agreed to go public by merging with special purpose acquisition company (SPAC) Qell Acquisition (NASDAQ: QELL). The SPAC was founded by former General Motors (NYSE: GM) executive Barry Engle, who has decades of experience in the transportation industry.
Here’s what investors need to know about Lilium.
Lilium Takes Flight. Time to Buy QELL?
Based in Germany, Lilium is developing an electric vertical takeoff and landing (eVTOL) jet that can seat up to 7 passengers. The company had completed its first successful test flight in late 2019, and the footage that Lilium released briefly went viral. The Lilium Jet is capable of traveling at 175 miles per hour and is expected to have a range of over 155 miles.
The vehicle uses Lilium’s proprietary Ducted Electric Vectored Thrust (DEVT) technology, which allows the aircraft to have greater capacity while also minimizing noise. Lilium’s jet has a cargo capacity of approximately 210 cubic feet, and the interior can be configured either for passengers or cargo.
Lilium believes that its DEVT technology can be scaled to larger aircraft, such as a 16-seater model that is in the works. Over time, battery cell technology will also continue to improve, which will deliver even greater range.
The company hopes to offer regional transportation services with a fleet of air taxis on its network, saving a considerable amount of travel time. Since the jets are capable of eVTOL, they can land in a diverse range of vertiports, which are similar to helipads.
The company recently partnered with Ferrovial to build a network of 10 vertiports in the U.S., starting in Florida. Lilium also plans to offer turnkey solutions to enterprise organizations and governments.
Each jet currently costs around $2.5 million, but Lilium estimates that each aircraft can potentially generate $5 million in annual revenue.
The SPAC Details: QELL and Lilium’s Merger Terms
The deal with Qell is expected to provide sufficient funding until Lilium’s commercial launch, which is expected in 2024. The SPAC has $380 million in its trust account, and Qell lined up an additional $450 million in PIPE (private investment in public equity) financing. The transaction values Lilium at a post-money equity value of $3.3 billion.
Qell’s public shareholders will end up collectively owning around 11% of the combined company once the merger is completed. The SPAC sponsors will get 1%, the PIPE investors will have a 14% stake, and existing Lilium shareholders will have 74%.
Lilium is forecasting revenue of nearly $250 million in 2024 once it launches its network, and hopes to grow sales to $5.9 billion by 2027.
The eVTOL SPAC boom
Lilium and Qell will join a growing group of eVTOL startups that are predominantly going public by merging with SPACs. Joby Aviation recently announced a merger with Reinvent Technology Partners (NYSE: RTP), just a few weeks after Archer Aviation said it would combine with Atlas Crest Investment (NYSE: ACIC).
Both of those companies utilize an open propeller design for their respective eVTOL aircraft.
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