Vertical Aerospace, the Bristol-based start-up developing electric-powered “flying taxis” has announced its intention to keep its “centre of gravity” in the UK despite an upcoming Wall Street Listing. This listing, which will take place via a reverse merger with a Spac (special purpose acquisition company) and values it at $2.2 billion, is expected to take place before the end of the year.
The start-up, founded by British renewable energy billionaire Stephen Fitzpatrick, employed around 100 staff at the beginning of the year. That has increased to around 290 over the course of 2021, with another 100 expected to be hired next year. Vertical Aerospace’s president Michael Cervenka insisted the plan is for the “vast majority” of its staff to remain based around Bristol despite the imminent Wall Street listing.
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“very much we see the UK as a great place to do this stuff,” Cervenka said, adding that its forthcoming combination with the Spac Broadstone Acquisition Corp “doesn’t suddenly swing our centre of gravity”.
The company is developing lightweight electric aircraft able to land a take-off vertically and designed for relatively short trips such as from an airport to city centre or between regional cities. It already has partnerships in place with Virgin Atlantic and American Airlines with the idea to provide “last leg” transport from an international airport to passengers’ final destination.
Cervenka did however comment on the different “mindset” the London and other European capital markets have when it comes to the need to invest heavily in a new market that has huge future potential but uncertainties and will take time to open up. He said that American investors have been open to the pitch and that
“there just isn’t that kind of mindset in the European and UK investment markets today, which is a real shame.”
He also reflected on the reality that while Spacs “sort of exist” in the UK and Europe the level of investment is nowhere near that seen in the USA. Spacs are shell companies that list on the stock exchange and raise money from investors before making an acquisition through a reverse merger. Vertical Aerospace takes over the Spac’s listing and the Spac’s investors get an equity share in the company at a pre-agreed valuation.
Vertical Aerospace’s Spac merger was announced in June with the expectation of raising $394 million in fresh investment capital. Last month another $200 million injection was announced, secured through a deal with investment vehicle Mudrick Capital.
For Vertical Aerospace, the incentive to list in New York via a Spac merger was two-fold. First, said the start-up, it will provide an opportunity for it to strengthen its corporate governance and transparency. And secondly, several of its competitors have already taken the same route, raising significant funds and it is now catching up.
The Palo Alto-based flying taxi start-up Archer announced its own Spac-merger in February which it said at the time would see it raise as much as $1.1 billion. Cervenka pointed out
“if someone else is raising a billion dollars, even if you’ve got the right product, you risk falling behind.”