Joby Aviation
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Joby Aviation makes its public trading debut on the NYSE
Joby Aviation is now public, 12 years after JoeBen Bevirt founded the company at his ranch in the Santa Cruz mountains. The air taxi developer began trading on the New York Stock Exchange on Wednesday under the ticker symbol “JOBY,” after completing a merger with special purpose acquisition company Reinvent Technology Partners.
As of 10:00 AM ET, the price per share was at $11.01, up 9.8% from its prior-day closing amount.
Joby’s post-transaction valuation now stands at $4.5 billion, the largest in the industry. It also now has the highest cash balance. All told, Joby has around $1.6 billion in total capital to take its air taxi operations to commercialization in 2024. That includes $835 million of private-investment-in-public-equity, as well as more than $500 million of capital on the balance sheet.
RTP reported to the Securities and Exchange Commission that around 63% of the 69 million ordinary shares were redeemed prior to the public trading debut, giving Joby access to $255 million out of the $690 million of cash held in trust from the blank-check firm.
We have been working for over a decade to get our technology ready for market and are excited to take this moment to celebrate our achievements so far. #nyse #experiencesquare #eVTOL @NYSE pic.twitter.com/XlpxXiA1Pa
— Joby Aviation (@jobyaviation) August 11, 2021
It’s a sizable amount, but creating an entirely new form of transportation is a capital-intensive business. Joby’s executive chairman Paul Sciarra told TechCrunch he thinks $1.6 billion will be enough to prepare the company for launch.
“We think that’s enough to execute on the things that matter over the next few years, and those are […] one, ensuring that we execute on the certification program; two, showing we can demonstrate our ability to repeatedly manufacturing these aircraft in a certifiable way; and then third and finally, the opportunity to lay the groundwork for commercial launch,” Sciarra said.
Joby is developing a five-seat electric vertical take-off and landing aircraft, which it unveiled to much anticipation in February. The company, which has backing from Toyota and JetBlue, has released a slew of announcements in recent months as it geared up for the public listing.
“A lot of people talk about us as a secretive company,” Bevirt said in an interview with TechCrunch. “We’re not actually a secretive company, we just choose to do the work and then show our work, rather than talking about it and then doing it.”
From $RTP to $JOBY
Joby’s merger with blank-check firm Reinvent, headed by LinkedIn co-founder Reid Hoffman, was announced in February. The transaction includes a few provisions to ensure longer-term collaboration, including a lock-up on founder shares for up to five years, as well as vesting provision with earnout not realized until the price per share reaches $50 — a $30 billion market cap.
SPACs are not a new instrument for going public, but they have gained a widespread presence in the transportation space, particularly amongst eVTOL startups looking to secure amounts of capital. Archer Aviation was the first developer to announce it would merge with a blank-check firm, followed by Joby, Lilium and Vertical Aerospace. But there are signs that the investment bubble may be starting to deflate: late last month, Archer cut its valuation by $1 billion in a “strategic reset” of the transaction terms with Atlas Crest Investment Corp.
Such turbulence is not uncommon in markets populated by pre-revenue companies. But despite now being a public company — and having shareholders to answer to — Sciarra said Joby’s task remains unchanged. “We can’t control the markets,” he said. “[Joby] is a company that’s been executing quietly for a very long time on things that matter. I think it’s going to be incumbent upon us to do the same as we make this transition to a public company: tell folks what we’re going to do, and then go out and do them. That, quarter by quarter, is what builds credibility, what combats skepticism, and what gives investors and frankly, the broader public, confidence that this is a company that means what it says.”
One way to frame the fate of air taxis is whether they will be more like autonomous vehicles or electric vehicles. The AV space circa five years ago was filled with companies setting ambitious expectations about when true self-driving cars would be on the roads, only to have multiple companies collapse or sell under the weight of overshot expectations.
But Sciarra suggested that a better analogy to the eVTOL industry as it currently stands is the early days of electric vehicles. He pointed out that Joby’s aircraft is designed to conform to existing safety and certification standards, with a trained pilot onboard, similar to how helicopters and planes operate today. “We didn’t want to compound the technical risk of developing a new aircraft with the technical and regulatory risk of developing full autonomy from day one.”
“We think about our approach as a little bit more Tesla versus, say, Waymo,” he added.
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Whisper Aero emerges from stealth to quiet drones and air taxis
The skies are on the cusp of getting busier — and louder — as drone delivery and electric vertical take-off and landing passenger aircraft startups move from moonshot to commercialization. One former NASA engineer and ex-director of Uber’s air taxi division is developing tech to ensure that more air traffic doesn’t equal more noise.
Mark Moore, who was most recently director of engineering at Uber Elevate until its acquisition by Joby Aviation, has a launched his own company called Whisper Aero. The startup, which came out of stealth this week, is aiming to designing an electric thruster it says will blend noise emitted from delivery drones and eVTOLs alike into background levels, making them nearly imperceptible to the human ear.
It’s a formidable challenge. Solving the noise problem comes down to more than simply cranking down the volume. Noise profiles are also characterized by other variables, like frequency. For example, helicopters have a main rotor and tail rotor that generate two separate frequencies, which makes them much more irritating to the human ear than if they were at a single frequency, Moore told TechCrunch in a recent interview.
Complicating the picture even further is that eVTOL companies are designing entirely new types of aircraft, ones that may generate different acoustic profiles than other rotorcraft (like helicopters). The U.S. Army recently undertook a research study confirming that eVTOL rotors generate more of a type of noise referred to as broadband, rather than tonal noise which is generated by helicopters. And as each eVTOL company is developing its own design, not all of the electric aircraft will generate the same level or kind of noise.
Whisper is designing its scalable product to be adoptable across the board.
Moore said the idea for the company had been fomenting for years. He and Whisper COO Ian Villa, who headed strategy and simulation at Elevate, realized years ago that noise (that is, less of it) was key to air taxis taking off.
“The thing that was abundantly clear was, noise matters most,” Villa said. “It is the hardest barrier to break through. And not enough of these developers were spending the time, the resources, the mindshare to really unlock that.”
Whisper CEO Mark Moore. Image Credits: Whisper Aero (opens in a new window)
Helicopters have mostly been able to get away with their terrible noise profile because they are used so infrequently. But eVTOL companies like Joby Aviation are envisioning far higher ride volumes. Moore is quick to point out that companies like Joby (which purchased Elevate at the end of 2020) are already developing aircraft that are many times quieter than helicopter, and are “a step in the right direction.”
“The question is, ‘is it enough of a step to get to significant adoption?’ And that’s what we’re focused on.”
Whisper is staying mum on the details of its thruster design. It has managed to attract around $7.5 million investment from firms like Lux Capital, Menlo Ventures, Kindred Ventures and Robert Downey Jr.’s FootPrint Coalition Ventures. It’s also aiming to convert its provisional patents with the United States Patent and Trademark Office sometime next year.
From there, the startup envisions launching in the small drone market around 2023, before scaling progressively up to air taxis. Moore said the goal is to get the thrusters manufactured and in vehicles by the end of the decade. Should the first generation of eVTOL go to market in 2024 (as Archer Aviation and Joby have proposed), Whisper’s product could potentially appear in second generation eVTOL.
In the meantime, Whisper will continue testing and working out remaining technical challenges – least among which is how to manufacture the end product at a reasonable cost. Whisper is also preparing to conduct dynamic testing in a wind tunnel, in addition to the static tests it has undertaken at its Tennessee headquarters, some in partnership with the U.S. Air Force.
“It’s got to be quiet enough to blend into the background noise,” Moore said. “We know this and that’s the technology we’re developing.”
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The air taxi market prepares to take flight
Twelve years ago, Joby Aviation consisted of a team of seven engineers working out of founder JoeBen Bevirt’s ranch in the Santa Cruz mountains. Today, the startup has swelled to 800 people and a $6.6 billion valuation, ranking itself as the highest-valued electric vertical take-off and landing (eVTOL) company in the industry.
As in any disruptive industry, the forecast may be cloudier than the rosy picture painted by passionate founders and investors.
It’s not the only air taxi company to reach unicorn status. The field is now dotted with new or soon-to-be publicly traded companies courtesy of mergers and special purpose acquisition companies. Partnerships with major automakers and airlines are on the rise, and CEOs have promised commercialization as early as 2024.
As in any disruptive industry, the forecast may be cloudier than the rosy picture painted by passionate founders and investors. A quick peek at comments and posts on LinkedIn reveals squabbles among industry insiders and analysts about when this emerging technology will truly take off and which companies will come out ahead.
Other disagreements have higher stakes. Wisk Aero filed a lawsuit against Archer Aviation alleging trade secret misappropriation. Meanwhile, valuations for companies that have no revenue yet to speak of — and may not for the foreseeable future — are skyrocketing.
Electric air mobility is gaining elevation. But there’s going to be some turbulence ahead.
Big goals and bigger expenses
Taking an eVTOL from design through to manufacturing and certification will likely cost about $1 billion, Mark Moore, then-head of Uber Elevate, estimated in April 2020 during a conference held by the Air Force’s Agility Prime program.
That means in some sense, the companies that will come out on top will likely be the ones that have managed to raise enough money to pay for all the expenses associated with engineering, certification, manufacturing and infrastructure.
“The startups that have successfully raised or that will be able to raise significant amounts of capital to get them through the certification process … that’s the number one thing that’s going to separate the strong from the weak,” Asad Hussain, a senior analyst in mobility technology at PitchBook, told TechCrunch. “There’s over 100 startups in the space. Not all of them are going to be able to do that.”
Just consider some of the expenses accrued by the biggest eVTOLs last year: Joby Aviation spent a whopping $108 million on research and development, a $30 million increase from 2019. Archer spent $21 million in R&D in 2020, according to regulatory filings. Meanwhile, Joby’s net loss last year was $114.2 million and Archer’s was $24.8 million, though, of course, neither company has brought a product to market yet. Operating expenses will likely only continue to grow into the future as companies enter into manufacturing and deployment phases.
What that means for the future of the industry is likely two things: more SPAC deals and more acquisitions.
Mobility companies, including those working on electrified transport, are often pre-revenue and have capitally intensive business models — a combination that can make it difficult to find buyers in a traditional IPO. SPACs have become increasingly popular as a shorter, less expensive path to becoming a public company. SPACs have also historically received less scrutiny than IPOs. Should the U.S. Securities Exchange Commission start to take a closer look at SPAC mergers in the future, it may impair the ability of other air taxi companies to go public this way, Hussain said.
That means market consolidation is nearly guaranteed, as smaller companies may find it more advantageous to sell than continue to raise more capital. It’s already begun: At the end of April, eVTOL developer Astro Aerospace announced the acquisition of Horizon Aircraft.
Horizon cited “greater access to capital” as one of the many benefits of the transaction, and other companies will likely find the buy or sell route to be the most beneficial on the road to commercialization. And just last week, British eVTOL Vertical Aerospace, which has an order for 150 aircraft from Virgin Atlantic, said it would go public via a merger with Broadstone Acquisition Corp. at an equity value of around $2.2 billion.
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Joby Aviation eyes Asia and Europe as early markets alongside North America
While electric vertical take-off and landing passenger aircraft startup Joby Aviation is targeting North America for its initial commercial launch, founder and CEO JoeBen Bevirt expects the company to have an early presence in Asia and Europe as well.
Bevirt, who joined the TC Sessions: Mobility 2021 on June 9, didn’t give away the first location; although recent announcements suggest it is narrowed down to Los Angeles, Miami, New York and the San Francisco Bay Area. But he did weigh in on what those first cities will look like.
“I imagine that we will have early markets in each of the three regions,” he said. “Our initial launch market will be in North America just for proximity to the nexus of where most of our team is currently. But there are incredible opportunities and cities around the world and we want to provide as much benefit to as many people as quickly as we possibly can. And so that’s why we’re so focused on scaling manufacturing.”
Joby Aviation is expected to begin construction on a 450,000-square-foot manufacturing facility, designed in conjunction with Toyota, later this year. The company has completed a pilot manufacturing facility already.
Joby, once a secretive startup, has had a far more public six months of late. The company reached a deal to merge with special purpose acquisition company Reinvent Technology Partners, formed by well-known investor and LinkedIn co-founder Reid Hoffman, Michael Thompson and Zynga founder Mark Pincus. Hoffman also joined Bevirt at the TC Sessions: Mobility event.
Prior to its SPAC deal, Joby had gained attention and investors over the years as it developed its eVTOL. Toyota became an important backer and partner, leading a $620 million Series C round of funding in January 2020. Nearly a year later, Joby acquired Uber’s air taxi moonshot Elevate as part of a complex deal.
Today, Joby is focused on certification, which it has been working on with the FAA since 2018, as well manufacturing its eVTOL aircraft. The company is also starting to put the pieces together for how and where it will operate. And that’s adding to its size. In the past year, Joby has doubled its workforce, which now sits at about 800.
Earlier this month, Joby Aviation announced a partnership with REEF Technology, one of the country’s largest parking garage operators, and real estate acquisition company Neighborhood Property Group to build out its network of vertiports, with an initial focus on Los Angeles, Miami, New York and the San Francisco Bay Area.
When 2024 arrives, Bevirt anticipates launching in one to two cities in that first year of operation.
“We do want to provide sufficient depth of coverage that consumers get to experience the transformative experience,” Bevirt said. “There have been cases where if a new service launches, and there’s not enough supply, consumers can be frustrated, right. And so we want to make sure we can, that we can really service, at least a portion of the demand and provide a really gratifying experience to our customers. I think that that’s the piece that we really care about as a company, is making customers into raving fans.”
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ChargerHelp co-founder, CEO Kameale C. Terry is heading to TC Sessions: Mobility 2021
Thousands of electric vehicle charging stations will be built around the country over the next decade. ChargerHelp!, founded in January 2020 by Kameale C. Terry and Evette Ellis, wants to make sure they stay up and running.
The idea for the on-demand repair app for EV charging stations came to Terry when she was working at EV Connect, where she held a number of roles including director of programs and head of customer experience. She noticed long wait times to fix non-electrical issues at charging stations due to the industry practice to use electrical contractors.
“When the stations went down we really couldn’t get anyone on site because most of the issues were communication issues, vandalism, firmware updates or swapping out a part — all things that were not electrical,” Terry said in an interview with TechCrunch earlier this year.
After Terry quit her job to start ChargerHelp!, she joined the Los Angeles Cleantech Incubator, where she developed a first-of-its-kind EV Network Technician Training Curriculum. Shortly after, Terry and Ellis were accepted into Elemental Excelerator’s startup incubator and have landed contracts with major EV charging network providers like EV Connect and SparkCharge.
The company uses a workforce-development approach to hiring, meaning that they only hire in cohorts. Workers receive full training, earn two safety licenses, are guaranteed a wage of $30 an hour and receive shares in the startup, Terry said.
We’re excited to announce that Kameale Terry will be joining us at TC Sessions: Mobility 2021, a one-day virtual event that is scheduled June 9. We’ll be covering a lot of ground with Terry, from how she developed her EV repair curriculum to what she sees in the company’s future.
Each year TechCrunch brings together founders, investors, CEOs and engineers who are working on all things transportation and mobility. If it moves people and packages from Point A to Point B, we cover it. This year’s agenda is filled with leaders in the mobility space who are shaping the future of transportation, from EV charging to autonomous vehicles to urban air taxis.
Among the growing list of speakers are Rimac Automobili founder Mate Rimac, Revel Transit CEO Frank Reig, community organizer, transportation consultant and lawyer Tamika L. Butler and Remix/Via co-founder and CEO Tiffany Chu, who will come together to discuss how (and if) urban mobility can increase equity while still remaining a viable business.
Other guests include Motional’s President and CEO Karl Iagnemma, Aurora co-founder and CEO Chris Urmson, GM‘s VP of Global Innovation Pam Fletcher, Scale AI CEO Alexandr Wang, Joby Aviation founder and CEO JoeBen Bevirt, investor and LinkedIn founder Reid Hoffman (whose special purpose acquisition company just merged with Joby), investors Clara Brenner of Urban Innovation Fund, Quin Garcia of Autotech Ventures and Rachel Holt of Construct Capital, Zoox co-founder and CTO Jesse Levinson.
We also recently announced a panel dedicated to China’s robotaxi industry, featuring three female leaders from Chinese AV startups: AutoX’s COO Jewel Li, Huan Sun, general manager of Momenta Europe with Momenta, and WeRide’s VP of Finance Jennifer Li.
Don’t wait to book your tickets to TC Sessions: Mobility as prices go up at the door. Grab your passes right now and hear from today’s biggest mobility leaders.
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Uber sells air taxi business Elevate to Joby Aviation, shedding its last moonshot
Uber has offloaded its air taxi enterprise Elevate to Joby Aviation, the last of several moonshots to be sold by the ride-hailing company in a pursuit to stick to its core business and reach profitability.
The transaction announced Tuesday is part of a complex deal that includes Uber investing $75 million into Joby and an expanded partnership between the two companies. Last year, Uber and Joby, which is developing an all-electric, vertical take-off and landing passenger aircraft, signed on as a vehicle partner for Uber’s Elevate initiative. Joby was the first partner to commit to deploying air taxi services by 2023.
The $75 million investment comes in addition to a previously undisclosed $50 million investment made as part of Joby’s Series C financing round in January 2020, Uber said. To date, Joby Aviation has raised $820 million. Uber has invested a total of $125 million into the startup.
Under the deal, which is expected to close in early 2021, the two parent companies have agreed to integrate their respective services into each other’s apps.
“Advanced air mobility has the potential to be exponentially positive for the environment and future generations,” Uber CEO Dara Khosrowshahi said in a statement. “This deal allows us to deepen our partnership with Joby, the clear leader in this field, to accelerate the path to market for these technologies.”
While Joby is considered one of the leaders, Elevate did play a role in shaping the nascent industry, including establishing some of the benchmarks used by competitors.
“The team at Uber Elevate has not only played an important role in our industry, they have also developed a remarkable set of software tools that build on more than a decade of experience enabling on-demand mobility,” Joby Aviation CEO JoeBen Bevirt said in a statement.” These tools and new team members will be invaluable to us as we accelerate our plans for commercial launch.”
One year ago, Uber’s business model could be categorized as an “all of the above approach,” a strategy to generate revenue from all forms of transportation, including ride-hailing, micromobility, logistics and package and food delivery. The COVID-19 pandemic and Khosrowshahi’s focus on profitability prompted the company to dump its moonshots and double down on delivery with its acquisition of Postmates.
Today, Uber is a company focused on ride-hailing and delivery while keeping its hand in micromobility, logistics and autonomous vehicles through a series of deals struck in 2020.
The Joby-Elevate terms are similar to two other Uber deals this year. In the spring, Uber led a $170 million funding round in micromobility startup Lime. As part of the deal, Lime acquired Uber’s micromobility subsidiary Jump. The majority of Jump’s 400 employees were laid off. Earlier this week, autonomous vehicle startup Aurora Innovation reached an agreement with Uber to buy the ride-hailing firm’s self-driving unit in a complex deal that will value the combined company at $10 billion.
Just like Uber’s deals with Lime and now Joby, Aurora isn’t paying cash for Uber ATG, a company that was last valued at $7.25 billion. Instead, Uber is handing over its equity in ATG and investing $400 million into Aurora, which will give it a 26% stake in the combined company, according to a filing with the U.S. Securities and Exchange Commission.
Uber said in October that it sold off a $500 million stake in its Uber Freight business to an investor group led by New York-based investment firm Greenbriar Equity Group. The deal valued the unit at $3.3 billion on a post-money basis. Uber has maintained its majority stake in Uber Freight, unlike the Jump, Elevate and ATG deals.
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