Archer, the Palo Alto based eVTOL OEM, has announced it has raised an additional $1.1B in capital from a SPAC merger with Atlas Crest Investment Corp. The merger values Archer at just under $4B ($3.8B) and includes investors including a new automotive joint venture, Stellantis, and United Airlines.
In addition to the SPAC merger, Archer has announced United Airlines will purchase 200 Archer eVTOL aircraft valued at $1B with purchase options for another 100 units.
“By working with Archer, United is showing the aviation industry that now is the time to embrace cleaner, more efficient modes of transportation,” United CEO Scott Kirby said in a release announcing the Archer SPAC.
Archer has been moving quickly since its founding only three years ago. The company plans to unveil its prototype later this year and certify operations in the United States and deliveries by 2024. The order by United Airlines also marks the first large-scale order by an existing aviation operation. United Airlines sees Archer as a suitable product for meeting its carbon net-zero initiatives and could use aerial mobility as a complementary product offering to its airline network.
“It’s pretty incredible to think how big this market can be,” Archer co-founder and co-CEO Adam Goldstein said. “The partnership with United really gives us a chance to get to market first and really helps us accelerate our timeline.”
The eVTOL market has exploded in recent years, with Deloitte estimating 200 companies worldwide are developing aircraft. Many are for cargo operations and others focus on passenger travel, which is expected to be a $4 billion market by 2025 and $57 billion by 2035, according to Deloitte as reported to a CNBC article on the news.
Why it matters: The SPAC merger and large order by United marks a significant investment in aerial mobility and brings eVTOL dreams closer to reality. By targeting a $3 per passenger-mile cost basis, Archer believes it can disrupt the urban transportation and offer customers like United Airlines a complementary service for transportation in dense areas and to/from large airports. Expect to see more news on Archer as incoming capital accelerates their developmental and certification efforts.