Vertical Aerospace announces today that it has secured USD50 million in committed funding from founder, majority owner and CEO, Stephen Fitzpatrick. The company says the investment provides the platform for further funding rounds and extends Vertical’s projected cash runway into Q2 2025, supporting the continued development of the certification aircraft design following prototype testing this year. This certification aircraft will then go into final regulatory testing before production.
“This funding comes at an important period for the company as it nears the completion of its second generation, full-scale piloted VX4 prototype at GKN Aerospace’s Global Technology Centre” according to the press release. “The aircraft will conduct a series of key public flight demonstrations in 2024, including the intention to fly at Farnborough International Airshow and to and from Heathrow Airport. These flights are expected to demonstrate the significant technical and engineering advancements made to the VX4. Following this flight test programme and planned public demonstrations, Vertical expects to be in position to refine and finalise its aircraft design.
“The funding comes off the back of several major milestones achieved by the company in 2023:
- “Opening the Vertical Energy Centre in January and building a complete battery powertrain with Molicel cells
- “Receiving Design Organisation Approval (DOA) from the UK Civil Aviation Authority (CAA) in March
- “Completing the thrust borne test campaign with the full-scale VX4 prototype by August
- “Pre-orders for 1500 VX4 aircraft worth over USD5bn from more than a dozen customers worldwide by October
- “Completing initial Technical Familiarisations with five global aviation regulators and proceeding to a key design review for the VX4
- “Starting final assembly for the second VX4 full-scale piloted prototype – which includes the technologies from the majority of the VX4’s certification aircraft partners
- “Strengthening the senior engineering team with hires across aircraft design, flight test, airworthiness and powertrain
“Vertical has an asset light, lower capital approach to eVTOL aircraft development, supported by its tier-one aerospace partner ecosystem and global operating partners. In 2023, Vertical’s unaudited results indicate that its net cash used in operating activities was approximately USD95 million, emphasising its disciplined approach to spend management.
“The Company and Mr. Fitzpatrick have entered into a legally binding term sheet agreement in respect of an equity investment by Mr. Fitzpatrick. Mr. Fitzpatrick will commit an initial tranche of USD25 million, which is expected to close by March 2024, for a mixture of ordinary shares at USD10 per share and warrants with a USD5 exercise price, and a second tranche of USD25 million by 31 July 2024 for ordinary shares at a price per share to be determined (such second tranche to be reduced by the amount of alternative equity funding secured by the Company by that date). As part of the transaction, shareholders will vote on certain changes to the Company’s articles of association with respect to Board composition and proceedings at shareholder meetings; and the Company will provide certain veto rights to Mr. Fitzpatrick, for so long as his holding of the Company’s ordinary shares remains above certain thresholds, in respect of certain changes to the company’s articles, appointments, and certain issuances of shares and other instruments. The closing of the transaction is subject to the entry into of long-form agreements and other customary closing conditions.”
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(Image: Vertical Aerospace)
