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How air taxi unicorn Volocopter plans to fund its 2024 service debut

June 7, 2022, 1:01 PM UTC

The year is 2024, and you have just deplaned your flight in Rome. It seems like a great time to call an electric air taxi to come pick you up. 

If Volocopter has its way, this will be possible in as little as two years. Volocopter, the Bruchsal, Germany-based electric air taxi startup, is hoping to launch its city air taxi service in Europe at the Paris Olympics in 2024, a service that would allow tourists and locals alike to pay roughly between $200-$300 to carriage around their city—in the sky. Volocopter has signed binding agreements and is designing its first routes in Rome and Paris, and the company is working to open up office space in France. 

“We are looking for offices right now and recruiting people there,” Christian Bauer, Volocopter’s Chief Commercial Officer, told me yesterday as we sat across from each other outside a restaurant in a small airport in Benton County. Later, Bauer would let me sit in and show me around the prototype Volocopter brought along that’s in a hangar nearby. Bauer is in Bentonville, Ark., for the UP.Summit, a conference hosted by venture capital firm UP.Partners, the late Walmart founder’s grandchildren Tom and Steuart Walton, and real estate businessman Ross Perot Jr.—where companies like Alphabet Wing, Boeing, Volocopter, DroneUp, and Wisk are showcasing their tech or talking about the future of mobility.

Term Sheet volocopter
Volocopter presents its prototype of its electric air taxi at the Up.Summit.
Jessica Mathews—Fortune

2024 may be the future, but it’s also only two years away—and there’s still a host of legwork for Volocopter before it will be able to make its grand debut in Paris. For one, no electric air taxi company has been granted full certification from the European Union Aviation Safety Agency (EASA), nor the Federal Aviation Administration (FAA), to run a commercial operation.

Volocopter has earned two of the four licenses needed for full certification from the EUASA, but it still needs an operating license as well as type certification, which would validate that the aircraft is safe for transportation and permit vertical take-off and landing. More than 130 projects are seeking the certification—and only the Pipistrel Velis Electro, a two-seater electric airplane, has been granted it. Volocopter has been working towards that license since 2017, Bauer says, and started working with the FAA in 2021.

Volocopter has conducted more than 1,200 test flights for its city air taxi and its cargo-transporting drones, Bauer explains. Last month, Volocopter completed its first flight for a third vehicle, the VoloConnect—its newest taxi that will be able to carry four passengers for up to 70 miles.

“With future technology, we can nearly double that range. I would assume that [would happen in] the next three to five years,” Bauer says, noting that they expect this iteration of the taxi to become available in 2026.

Volocopter is earning minimal revenue at this point, and has largely relied on private fundraising—and during its infancy, crowdfunding—to operate and scale into the 600-person company it is today. Some of its competitors, including Joby Aviation and Vertical Aerospace, went public during the pristine markets that defined the last two years. But both of those companies’ stocks are are trading approximately 30% below what they were at the beginning of this year.

Volocopter had looked into going public via a SPAC merger, but ultimately canceled those plans. Instead, the company has stayed private, raising more than $243 million in early 2021 from investors including Intel Capital, Japan Airlines Company, and BlackRock. It started fundraising around November of 2021, announced the first close of its Series E round at $153 million earlier this year, and is still raising money (Bauer notes that some of the investors are follow-on, while the rest are new investors). 

Naturally, I had to ask how the current market conditions could impede its fundraising efforts and timeline to launch its taxi service.

“You wouldn’t believe it, but I really feel we are in a very comfortable position right now,” Bauer says, adding that he believes the company now has an edge in the private markets, given that other competitors have gone public. Bauer says Volocopter still has a strong pipeline of investors for the next close of its Series E round and that, regardless of the second close, the company is comfortable and has a runway with the funding it has already raised.

Volocopter’s new CEO, Dirk Hoke, the former CEO of Airbus Defence & Space, will step into his new role later this year. Bauer insisted that Florian Reuter, the current chief executive, is stepping down voluntarily, noting that it was actually he who proposed Hoke become the new CEO and carry the company into its next iteration. 

Bauer is visibly excited about the potential he sees in reducing emissions and making air transportation quieter—and eventually more affordable. But nothing lit up Bauer’s face quite like discussing his 10-year-old son watching the Volocopter fly in Bauer’s hometown in Germany.

“He was proud of what his dad was doing,” Bauer says.

Delivered by robot… Serve Robotics, the autonomous robot delivery startup backed by Uber and 7-Eleven, is working with Walmart, the startup’s CEO Ali Kashani told me yesterday. “We’ve done some work together,” Kashani said, noting it was on a small scale and declining to comment further. I had spotted these robots on sidewalks around Bentonville the past couple months, but Kashani showed me the technology up close. 

Last year, Serve Robotics became an independent company after Uber invested and Kashani spun it out of Postmates. Kashani mentioned that it is also working with Chili’s, and that the company will be announcing more partners in the near future.

Earlier this year, Serve Robotics achieved level four autonomy—meaning that its robots can function independently, making deliveries all day long without needing a human to supervise them constantly. The robots use the same kind of sensor technology and software as self-driving cars, Kashani tells me. 

Serve Robotics achieved level four autonomy for its delivery robots earlier this year.
Jessica Mathews—Fortune

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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This edition of Term Sheet has been updated to reflect the following corrections:

The prototype mentioned is named Volocopter, not Wingcopter; UP. Partners is one of the hosts of the UP.Summit conference, not UP. Ventures; and the correct abbreviation for the European Union Aviation Safety Agency is EASA, not EUASA.

Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Vayyar Imaging, a Yehud-Monosson, Israel-based imaging radar sensor developer, raised $108 million in funding. Koch Disruptive Technologies led the round and was joined by investors including GLy Capital Management, Atreides Management, Battery Ventures, Bessemer Ventures, KDT, More VC, Regal Four, and Claltech

- Insilico Medicine, a Hong Kong and New York-based clinical-stage drug discovery company, raised $60 million in Series D funding. BHR Partners, Warburg Pincus, B Capital Group, Qiming Venture Partners, BOLD Capital Partners, and Pavilion Capital invested in the round. 

- Religion of Sports, a Santa Monica, Calif.-based sports media production company, raised $50 million in Series B funding. Shamrock Capital led the round and was joined by investors including Elysian Park Ventures and Cerro Capital.

- Magical, a remote-based repetitive task automation tool, raised $35 million in Series A funding. Coatue Management led the round and was joined by investors including Greylock, Bain Capital Ventures, Lightspeed Capital, SV Angels, Blank Ventures, and BoxGroup

- Fergus, an Auckland, New Zealand-based job management software for trades businesses, raised $15 million in Series B funding led by Octopus Ventures.

- Kinside, a San Francisco-based child care marketplace, raised $12 million in Series A funding. Wellington Access Ventures led the round and was joined by investors including Magnify Ventures, Initialized Capital, and Maven Ventures

- MachineFi Lab, the San Francisco-based core developer of IoTeX, raised $10 million in seed funding. Samsung Next led the round and was joined by investors including Draper Dragon Fund, Jump Capital, and others.  

- Prokeep, a New Orleans-based communications and commerce platform for distributors, raised $9 million in seed funding. Ironspring Ventures led the round and was joined by investors including S3 Ventures, Benson Capital Partners, and other angels. 

- IndieFlow, a Santa Monica, Calif.-based operating system for independent music creators, raised $4 million in funding. State of Mind Ventures led the round and was joined by investors including Oryzn Capital, StreamElements co-founder Or Perry, 5 Eyes Venture, TechStars, and Moshe Gaon

- Dock, a San Francisco-based collaborative workspace for customers, raised $3 million in seed funding. Altman Capital led the round and was joined by other angels. 

PRIVATE EQUITY

- Sterling Group agreed to acquire Ergotron, the Saint Paul, Minn.-based ergonomic desks and office accessories unit of Melrose Industries, for $650 million. 

- Bain Capital acquired a minority stake in Cuisine Solutions, a Sterling, Va.-based sous vide foods provider, for $250 million.

- Grey Rock investment Partners agreed to invest up to $150 million in Vault 44.01, a Calgary-based carbon capture and storage developer. 

- Alpine Investors acquired Michael Management Corporation, a San Diego-based SAP training provider and Web Age Solutions, a Toronto-based IT training company. Financial terms were not disclosed. 

- Aquarian Holdings agreed to acquire a majority stake in Somerset Reinsurance, a Hamilton, Bermuda-based life and annuity reinsurance company. Financial terms were not disclosed. 

- Bain Capital acquired a majority stake in EnterpriseDB, a Bedford, Mass.-based open source database management system. Financial terms were not disclosed.

- Bain Capital agreed to acquire a majority stake in LeanTaaS, a Santa Clara, Calif.-based cloud software company for hospital operations and capacity management. Financial terms were not disclosed. 

- GTCR acquired a majority stake in Visionary Broadband, a Gillette, Wyo.-based internet service provider. Financial terms were not disclosed. 

- KKR acquired a majority stake in apexanalytix, a Greensboro, N.C.-based supply chain risk management services provider. Per terms of the deal, Carousel Capital will retain a minority stake in the company. Financial terms were not disclosed.

- Outdoor Living Supply, backed by Trilantic North America, acquired The Rock Garden, a Truckee, Calif.-based independent distributor of natural stone, hardscapes, and architectural elements. Financial terms were not disclosed. 

- An affiliate of Peak Rock Capital acquired 626 Holdings Equity, a Delray Beach, Fla.-based  imaging equipment maintenance services provider. Financial terms were not disclosed. 

- Polaris acquired a majority stake in Esoft Systems, an Odense, Denmark-based photos, video, text and digital marketing provider for the real estate industry. Financial terms were not disclosed. 

- Sachs Capital acquired Mr. Christmas, a New York-based holiday decor business. Financial terms were not disclosed. 

EXITS

- Bain Capital Private Equity acquired VXI Global Solutions, a Los Angeles-based customer care solutions provider, from Carlyle. Financial terms were not disclosed. 

- CRH agreed to acquire Barrette Outdoor Living, a Middleburg Heights, Ohio-based residential fencing and railing products maker, from TorQuest Partners, for $1.9 billion.

OTHER

Bristol Myers Squibb agreed to acquire Turning Point Therapeutics, a San Diego-based pharmaceutical drug developer, for $4.1 billion. 

IPOS 

- Intuity Medical, a Fremont, Calif.-based automated self-contained blood glucose monitor developer, withdrew its plans for an initial public offering at $75 million. 

FUNDS + FUNDS OF FUNDS

- Ten Eleven Ventures, a Burlingame, Calif.-based investment firm, raised $600 million for a fund focused on seed to growth stage security companies. 

PEOPLE

- QED Investors, an Alexandria, Va.-based venture capital firm, hired Camila Vieira as principal. Formerly, she was with Hotmart.

- Victory Park Capital, a Chicago-based alternative investment firm, hired Chad Clamage as principal and Ahmed Eltamami as vice president. Formerly, Clamage and Eltamami were both with Burford Capital

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