Vertical Aerospace, a British start-up developing flying taxis, is reportedly on the verge of reaching an agreement with Wall Street SPAC, a blank cheque company, for a deal that would see it go public in the USA at a valuation of almost $2 billion. A deal between the Bristol-based tech company and the SPAC, Broadstone Acquisition Corp., could be announced as early as today.
Five-year-old Vertical was founded in 2016 by Stephen Fitzpatrick, the serial entrepreneur behind energy supplier Ovo. Broadstone was founded and listed last year by Hugh Osmond, another British serial entrepreneur who founded Punch Taverns and also ran Pizza Express for a period in the 1990s that saw the company go public and expand to hundreds of sites.
Vertical Aerospace is developing an aircraft designed to operate as a flying taxi able to take off and land vertically like a helicopter thanks to tilting propellers. The start-up’s first flying taxi prototype, the VA-X4, carries up to four passengers plus the pilot and can reach speeds of over 200 mph. Entirely battery-powered it is also almost silent, making it ideal for urban travel such as airport to city centre routes or inter-city travel.
The company says a VA-X4 trip between Bristol and London would take just half an hour with 2024 being targeted by Vertical Aerospace to have its first aircraft certified and in commercial operation.
Broadstone is a SPAC, special purpose acquisition company – a shell company listed on the stock exchange designed to give a company a direct public listing via a reverse takeover or merger. It has raised $300 million from investors speculating on the success of whatever company it eventually strikes a deal with to take public.
The SPAC invests its cash in return for an equity stake in the company it merges with based on an agreed valuation. Many analysts believe SPACs have recently been over-valuing loss-making start-ups in their enthusiasm to take advantage of a hot market for technology stocks.
Interest from investors in electrical vehicles companies and eVTOLs (electric vertical take-off and landing craft) has soared over the past year with tens of start-ups listing via SPAC deals. The flying taxi sector is expected to become a reality with a number of start-ups working on either developing the aircraft or striking partnerships to buy aircraft and run the service. Some of the best known names in the space include Uber, Lilium, Joby Aviation and Archer.
Vertical is the only UK-based start-up developing flying taxi technology with Lilium based in Munich, Germany, and the others all U.S. companies. Scottish Mortgage, the hugely successful growth fund focused on technology companies holds small stakes in Lilium and Joby.
Founder Mr Fitzpatrick has so far funded the start-up personally from a fortune estimated at a little under £700 million. It has been working with British aerospace engineering giants Rolls-Royce and US aerospace and materials science conglomerate Honeywell. Its chief executive is Michael Cervenka, a former Rolls-Royce executive.
Neither Vertical nor Broadstone offered any comment on the reports but the latter’s share price gained 1.3% during yesterday’s Wall Street session.