Vertical Aerospace has secured $50 million in committed funding from founder, majority owner and CEO Stephen Fitzpatrick. 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. 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.
Fitzpatrick says: "Since founding Vertical in 2016 I have continued to believe in the enormous potential the company has to pioneer zero carbon aviation. The company has achieved significant technical progress both in its prototype programme and its certification plans in 2023 that I believe is not reflected in our share price. Given the success I have seen in the past 12 months, I am more confident than ever in our world class team and I am delighted to further support the company with additional funding."
Chairman Mike Flewitt adds: "I am delighted that Stephen has committed to further funding Vertical. His vision and funding to date have enabled Vertical to be a frontrunner in the advanced air mobility industry and I look forward to both our demonstrations and the completion of additional funding rounds to deliver on the promise the VX4 has to offer our customers and their passengers. We are on track to deliver a transformative UK developed electric aircraft to our customers across the globe."
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 from the UK CAA in March.
- Completing the thrust-borne test campaign with the full-scale VX4 prototype by August.
- Pre-orders for 1,500 VX4 aircraft worth over $5 billion 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 that 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 $95 million, emphasising its disciplined approach to spend management.
The company and Fitzpatrick have entered into a legally binding term sheet agreement in respect of his equity investment. Fitzpatrick will commit an initial tranche of $25 million, which is expected to close by March 2024, for a mixture of ordinary shares at $10 per share and warrants with a $5 exercise price, and a second tranche of $25 million by 31 July 2024 for ordinary shares at a price per share to be determined.