Germany’s Lilium will be the latest electric aviation startup to go public via a reverse merger with a specialty acquisition company, or SPAC. Lilium will merge with Qell Acquisition, a SPAC founded by former General Motors director Barry Engle. The newly formed company is listed on Nasdaq under the ticker symbol ‘LILM’.
As part of the announcement, Lilium unveiled a new seven-seat electric aircraft that will reportedly be launched in 2025 as part of an intercity flying taxi service. It was previously said that the company’s prototype had only five seats – so we can assume that Lilium’s ambitions to carry more passengers are growing along with her financial expectations.
It is the latest electric vertical takeoff and landing (eVTOL) start-up deal after the SPAC deals from Sagittarius and Joby Aviation. A SPAC is a blank check company created as an alternative to an IPO because it raises money for an operation that has no income of its own. There has been a wave of SPAC deals involving companies in the transportation industry, including electric cars, autonomous vehicles, and micromobility
Lilium’s SPAC deal values the combined company at a pro forma enterprise value of $ 2.4 billion and pro forma equity of approximately $ 3.3 billion. Upon completion of the merger, Lilium is expected to receive approximately $ 830 million from the deal, including $ 450 million from a fully committed common stock PIPE offering and $ 380 million in cash on hand. The deal is expected to close in the second quarter of 2021, after which the company will begin trading on the Nasdaq exchange.
Engle, a longtime executive vice president and president of GM’s North American division, will join the newly formed company’s board of directors, as will former Airbus CEO Tom Enders. Engle described Lilium’s product as “a high-quality aircraft”.
The type of aircraft that Lilium is developing is typically called a ‘flying car’, electrically powered, which can only carry a handful of passengers and is intended for short flights within a city or region. This type of vehicle is still in the prototype phase and has yet to be rolled out for commercial services.
The company completed the initial test phase of its five-seat, 36-rotor electric prototype in October 2019, with the aircraft reaching speeds of 100 km / h (62 mph). Lilium says it remains “on track” to launch passenger operations in various locations around the world by 2025.
The new seven-seat jet has an expected cruising speed of 280 km / h at 10,000 feet and a range of 250 miles. That’s slower and with less range than the company’s projections for its five-seater plane, which Lilium said would have a top speed of 300 km / h and a range of 300 kilometers. Still, the company says this is the “culmination of five years of technology development across four generations of technology demonstrators, including Lilium’s full-size 5-Seater.”
Lilium applied for certification from the US Federal Aviation Administration in 2018, which can typically take several years. The company has also applied to the European EASA for certification.
Of course, many companies – including Lilium – have been promising revolutionary new aircraft for years, only to miss deadlines or fail to deliver on previous promises. Kitty Hawk, the flying car company backed by Google co-founder Larry Page, had to reorganize amid reports about malfunctions, battery fires and returned deposits. Another startup, Zunum, is engaged in a bitter legal battle with its former investor, Boeing. And last year, the German Lilium Jet had one prototype catches fire