Germany-based Air taxi start-up Volocopter GmbH filed for insolvency proceedings on December 30, citing its inability to raise new funds to maintain regular operations.
The Mercedes-Benz and Honeywell-backed company plans to continue business operations during the insolvency proceedings while seeking additional funding.
“Despite recent intensive fundraising efforts, finding a viable solution to maintain regular operations outside of insolvency proceedings has not been possible,” the Bruchsal, Germany-based firm said, with German legal firm Anchor Rechtsanwältegesellschaft partner Tobias Wahl now being appointed as administrator.
Whilst acknowledging that Volocopter has thus far “successfully operated in an extremely difficult financial environment,” CEO Dirk Hoke explained that “despite recent intensive fundraising efforts, finding a viable solution to maintain regular operations outside of insolvency proceedings has not been possible.”
The electric vertical take-off and landing (eVTOL) industry is facing a financial crunch. Companies are persistently seeking new investments to support their capital-intensive operations as they prepare for commercial operations.
“Business operations are intended to continue as normal during the provisional insolvency proceedings, with an initial staff meeting held. Wahl has also initiated an investor process, confirming that despite having enjoyed one of the lowest [cash] burn rates in the industry, the company nevertheless needs financing to take the final steps towards market entry,” reported Aerospace Global News.
Volocopter became the first European eVTOL developer to gain design organisation approval for its two-seat, by piloting VoloCity craft. Flight testing of the craft (including international excursions) has been ramping up in 2024 in pursuit of EASA SC-VTOL certification.
Although Volocopter’s original intention to offer passenger flights during the recently concluded Paris Olympics fell flat, it did nonetheless make a milestone demonstration ascent from the Palace of Versailles. Founded in 2011, Volocopter was scheduled to enter the market in 2025 with its urban eVTOL, the VoloCity.
The insolvency filing also follows a change in Volocopter’s leadership. In September 2024, the board approved Hoke’s request to step down from his role as CEO at the end of February 2025. In mid-November, Volocopter also appointed Oliver Vogelgesand, who had previously held the CFO position at now-bankrupt Lilium, as chief financial officer, who stated at the time that he has “delighted to join Volocopter, especially at this stage of proximity in achieving aircraft type certification, to strengthen its financial composition and future-proof its company’s ambitious growth.”
In November 2024, Volocopter’s peer Lilium, which stood in a precarious situation of ceasing operations and letting go all of its more than 1,000 employees, as the Munich-based start-up had recently failed to secure follow-on funding, received a surprise lifeline on December 24th. It has now announced the signing of an asset purchase agreement with Mobile Uplift Corporation. Mobile Uplift is a company set up by an experienced consortium of investors from Europe and North America, who intend to acquire the operating assets of the subsidiaries Lilium GmbH and Lilium eAircraft GmbH.
Subject to the satisfaction of certain conditions precedent, Lilium expects that the agreement positions the subsidiaries to obtain sufficient funding to restart their business operations. Proceeds received from the sale will be utilised according to German Insolvency Law, with no amounts being distributed to Lilium NV.
As reported by German media, KPMG has been in discussions with potential investors who have indicated interest in the subsidiaries’ assets and/or business. Lilium’s creditor committee has considered these interests as part of the KPMG-led M&A process aimed at delivering Lilium’s financial restructuring.
“Following the closing, the parties aim to implement the planned restructuring of the subsidiaries, which is intended to enable the subsidiaries to exit their self-administration proceedings. On December 20, 2024, the subsidiaries terminated the contracts of their remaining employees in accordance with German law,” reported the EU Startups.
Deal closing is expected for early January 2025 and is subject to the satisfaction of certain customary conditions precedent, including the opening of the proceedings and consent of the creditors’ committee. Most Lilium team members will receive the opportunity to rejoin the organisation. The young company requires a few hundred million euros to support its certification process, ramp up production, and achieve its goal of conducting the first manned flight.