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Paris 2023: “eVTOL funding rises but manufacturer cash reserves limited – McKinsey

The future air mobility (FAM) industry has attracted USD2.5 billion raised year to date (YTD) in 2023, up 15 percent from the first six months of 2022, according to new figures from McKinsey & Company.

“That is lower than the record funding levels of 2021, but still noteworthy given the challenging fundraising environment,” says the consultants. “We have recorded USD4.8 billion in disclosed funding over the last 12 months and USD19.8 billion raised over the last decade. The FAM funding pipeline is outperforming the broader venture-capital (VC) funding flows, which are down more than 50 percent for the first five months of 2023, compared to the first five months of 2022. In contrast to VC, broader equity markets are improving, up 12.6 percent in 2023 after being down 19.6 percent in 2022. The most active segments for FAM investors continue to evolve, moving recently to surveillance and cargo drone players, which have accounted for 51 percent of funding in 2023 but represented less than 15 percent in previous years. “

But the company also reports there are challenges with cash reserves for some of the leading eVTOL manufacturers.

“Complicating a potential recovery in FAM funding are the realities of cash reserves among companies. The public eVTOL companies have an estimated ten to 33 months of cash remaining, based on current spend levels and cash on hand. Some companies could reach certification with their current cash reserves, yet they could still need additional capital to fund the subsequent production phase. Further, it will take time for companies to ramp up operations to full scale, limiting revenues from passenger tickets. Finally, program delays are highly common in new aircraft programs; multiple FAM companies have already announced such delays and more are likely to follow.”

(Image:Shutterstock)

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