Private equity and venture capital professionals expect strong eVTOL order books but market consolidation

Brandon Robinson, CEO of Horizon Aircraft said, “As the eVTOL market develops, the industry’s order book is expecting strong growth, but our research clearly shows there is also expected to be significant consolidation in both the number of companies in the sector and prototype aircraft.

“Investors will increasingly focus on those aircraft that have the best chance of meeting regulatory requirements and have the potential to be commercially viable.”

Horizon Aircraft, and its Cavorite X5 eVTOL are enjoying strong progress with several grants, a US Department of Defence research and development contract award, and a flying large-scale prototype.

Horizon’s innovative approach and technology allows its Cavorite X5 to fly 98% of its mission in a very low-drag configuration like a traditional aircraft. Flying most of the time as a normal aircraft is also safer and should make the aircraft easier to certify than radical new eVTOL designs.

The full-scale aircraft will also be powered by a hybrid electric system that can recharge the battery array in-flight while providing additional system redundancy. Comprehensive testing of this 50%-scale aircraft will reduce technical risk moving forward as Horizon continues development of its full-scale aircraft.

The study found that professional investors expect manned advanced air mobility aircraft to continue to dominate the order books. They accounted for around 80% or orders in 2021, and by 2025, (1) 72% of private equity and venture capital professionals predict them to account for between 80% to 90%. One in five (21%) said they will make up around 80% of orders, and just 4% said it will be less than this.

However, despite a growing order book, 86% of the private equity and venture capital professionals interviewed expect the rate at which eVTOL concepts – there are currently around 700 – go defunct over the next three years to increase. One in five (22%) anticipate a dramatic rise. Similarly, they anticipate a fall in the number of manned advanced air mobility companies by 2025. There are currently around 300 of these companies, but in three years time 69% of professional investors surveyed said the number will fall. Around 18% think there will be 150 or fewer, and 31% believe there will be between 200 and 250. One in five (20%) anticipate there being between 250 and 300 manned advanced mobility companies.

(1)  McKinsey & Co February 2022

(2) Horizon Aircraft commissioned the market research company PureProfile to survey 100 senior private equity and venture capital professionals to capture their views on their eVTOL market. Respondents were based in the US, Canada, UK, Australia, New Zealand, China, Hong Kong, Germany, and the UAE. The survey was conducted online in November 2022.