The Next Step in Amazon’s Delivery Transformation
Flying cars, also known as electric air taxis, have long surrounded us thanks to science fiction staples such as “Back to the future” and “The Jetsons. “But with big brands like Boeing (NYSE: BA), Airbus (OTCPK: EADSF), Hyundai, and Toyota (NYSE: TM) Now promising to fly passengers through the skies in flying taxis and receiving an intoxicating dose of Wall Street approval, the dream is getting closer and closer to reality.
Indeed, many experts are now convinced that short-range air mobility is closer to becoming a reality than ever before in history, mainly thanks to massive advances in battery technology and autonomous flight. And make no mistake: flying taxis have real potential to completely restructure public and private transport, relieve congestion on our roads and reduce greenhouse gas emissions.
In fact, a study by Morgan Stanley to study says the market for autonomous urban aircraft will continue to mature over the current decade and then explode globally to $ 1.5 trillion by 2040.
This year, we witnessed the IPO of two electric aircraft startups: Joby Aviation Inc. (NYSE: JOBY), which went public in August, and Archer Aviation Inc. (NYSE: ACHR), which was listed in September, both through SPAC deals.
And, it looks like there isn’t a shortage of electric aircraft companies in the IPO pipeline: Amazon and UPS-supported Beta technologies have developed Alia, an electric vertical take-off and landing plane, or “eVTOL”, a helicopter-type plane that can take off and land without a runway.
However, unlike competitors like Joby, Archer or Larry Page’s Kitty hawk, Alia is primarily designed as a cargo plane with the company and its investors betting that the business of accelerating e-commerce to and from suburban warehouses will mature long before air taxis are considered safe to navigate the world. sky above the city streets.
“We are actually going to win the passenger game because by the time others do passenger missions, we will have thousands of planes, millions of flight hours and a safe, reliable and approved design ”, the company’s founder and CEO, Kyle Clark, told Forbes.
Alia’s bulbous cabin is designed to accommodate 600 pounds of payload, including the pilot, for up to 250 nautical miles, or up to 1250 pounds for 200 miles with any of the five battery packs removed. That’s at least 100 miles more than any competitor can currently handle, although Clark expects the FAA to limit flights to 125 miles.
Clark envisions Alia flying directly from one UPS warehouse to another, eliminating truck trips as well as plane theft, and possibly directly to large customers. This will require a radical redesign of the current hub-and-spoke delivery network models that cargo planes typically use. The CEO estimates that frequent flights will result in up to 90% fuel savings and cheaper maintenance due to the reduced number of parts in the electric propulsion systems, as well as an additional 35% reduction in operating expenses. operation when fully autonomous flight becomes a reality.
If that sounds a bit ambitious, it’s because Beta is developing another disruptive and parallel activity: the construction of charging stations for electric planes of all types.
Beta has already built nine such stations on a line from Vermont to Arkansas, and 51 more are under construction or in the process of being licensed. Most will store used Alia battery packs after their capacity has decreased by around 8%. This will give the startup a profitable second life when the company sells replacement packs to Alia owners at around half a million per pop. Clark’s plan is for them to slowly fill up at off-peak hours, with excess electricity being sold to utilities at peak times.
“The plane is the sexy part but we’ll make a lot of money with the batteriesClark exclaimed.
While these industries look impressive, another big reason Beta Technologies is getting so much attention can be attributed to its well-heeled investors.
The beta account Amazon and Loyalty management as early stage investors, while angel investor Martine Rothblatt who helped fund Sirius Satellite and United Therapeutics, contributed to a seed fund of $ 52 million. Beta also won major pre-orders: UPS signed a letter of intent to purchase up to 150 Alia planes, for $ 4-5 million each, with delivery of the first ten planes slated for 2024. Rothblatt, inspired by her daughter’s lung disease, ordered 60 planes and eight charging stations from Beta to help quickly deliver perishable organs to hospital helipads.
Beta also won contracts worth $ 43.6 million to test Alia for military use after becoming the first electric aircraft to gain Air Force airworthiness approval for manned flight in May.
Beta Technologies, which was valued at $ 1.4 billion after its last funding round in May, is compared to another Amazon-backed electric vehicle startup that recently surpassed a valuation of $ 100 billion: Rivien inc. (NASDAQ: RIVN).
“They see a lot of parallels between Beta and RivianSays Edward Eppler, CFO of Beta and former Goldman Sachs investment banker.
It’s not yet clear when Beta Technologies might go public, but there’s a good chance they’ll avoid joining the SPAC train and opt for a traditional IPO instead.
SPACs are blank check companies with no proceeds, revenues or profits that are formed specifically to make acquisitions with the intention of going public later. A PSPC merger has a number of advantages, including a shorter time frame (months versus over a year for an IPO), lower costs because there are fewer bank and subscription fees and, most importantly ( for some companies) less regulatory oversight.
The past few years have seen a wave of electric vehicles, including Nikola Corp. (NASDAQ: NKLA) and Lordstown Engines (NASDAQ: RIDE) become public through the PSPCs. However, these agreements quickly fell into disuse after criminal proceedings have been launched against the founder of Nikola and an SEC warning of companies misleading investors into PSPC transactions. This is one of the main reasons why SPACs are subject to increased scrutiny by regulators.
Indeed, the IPOX SPAC index, a mix of 50 SPAC and De-SPAC, has crashed 33% since its peak in February.
Change of the IPOX SPAC index
By Alex Kimani for Oil Octobers
More reads on Oil Octobers: