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Joby Aviation raises $1.6 billion in SPAC merger at $6.6 billion valuation

By Brian Garrett-Glaser

Published on: February 24, 2021
Estimated reading time 8 minutes, 46 seconds.

Joby Aviation, widely considered the leader in eVTOL technology, will go public via merger with blank-check firm Reinvent Technology Partners at a valuation of $6.6 billion.

Joby Aviation will merge with special purpose acquisition company Reinvent Technology Partners (RTP) in a deal that provides the Santa Cruz-based eVTOL developer with approximately $1.6 billion in cash, resulting in a post-money valuation of $6.6 billion.

Joby Aviation goes public
Joby Aviation, widely considered the leader in eVTOL technology, will go public via merger with blank-check firm Reinvent Technology Partners at a valuation of $6.6 billion. Joby Aviation Photo

The transaction, expected to close in Q2 of 2021, will see Joby Aviation listed on the New York Stock Exchange as the company continues working toward its long-term vision of saving a billion people an hour a day via quiet, affordable electric vertical flight. Contributors to the $835 million private investment in public equity (PIPE) include Uber Technologies, The Baupost Group, funds and accounts managed by BlackRock, Fidelity Management & Research LLC, and Baillie Gifford — strategic and institutional investors that typically take a long view to their portfolio strategy.

To keep shareholder incentives aligned with the time horizon necessary to bring Joby’s vision to life, the company’s merger with RTP includes up to a five-year lockup agreement on founder shares and an earnout structure that doesn’t include full vesting until the company reaches a $30 billion market capitalization.

Long considered the leader in eVTOL aircraft development, Joby Aviation has conducted almost 1,000 test flights on full-scale prototypes and is the first and only known eVTOL company to have received airworthiness approval from the U.S. Air Force and agreed upon a certification basis for its aircraft with the Federal Aviation Administration. The G-1 certification basis is expected to be published in the Federal Register in the next few months.

Proceeds of the merger with RTP, which include $690 million cash in trust plus an $835 million PIPE and a $75 million convertible note, are expected to fund the company through certification, development of manufacturing facilities, and the beginning of service, which Joby intends to achieve by 2024. The company will begin construction on a 450,000 square foot manufacturing facility, designed in conjunction with strategic investor and partner Toyota Motor Group, later this year.

Joby announced the addition of Matthew A. Field to its leadership team as chief financial officer, previously responsible for the financial operations of a $100 billion operation at Ford North America. Bonny Simi, founder of JetBlue Ventures, also joined the company earlier this year as chief of air operations and people.

In a video released by Joby announcing the deal, founder JoeBen Bevirt can be clearly heard explaining the company’s long-term vision as Joby’s five-seat eVTOL aircraft takes off approximately 100 feet behind him.

Joby aims to deploy more than 10,000 aircraft in the coming decade, Bevirt told investors during a brief presentation after the deal was announced, with just under 1,000 in service by 2026 and expected revenue that year exceeding $2 billion.

Each aircraft is projected to cost $1.3 million to manufacture and generate $2.2 million in annual revenue, resulting in a payback period of 1.3 years per plane based on an assumed passenger load factor of 2.3 and approximately 4,500 operating hours per year — or about 2,500 flight hours, according to Joby. Bevirt expects, as most eVTOL companies do, the company’s revenue generation constraints to be not on the demand side but on how many aircraft can be produced.

“As we look to expand scale and capitalize on lower cost manufacturing opportunities, we believe [production cost] can be cut in half,” Bevirt said. “This means that on a per vehicle basis, we have an extremely favorable cost profile with an average payback of about a year on an aircraft that will last more than 10.”

Joby also expects the energy consumption of its aircraft to be on par with ground-based electric vehicles, particularly on longer flights.

Reid Hoffman, co-founder of LinkedIn and co-director of RTP, will join Joby Aviation’s board of directors once the transaction closes. Hoffman is known to be a vocal proponent of safe autonomous mobility; in 2018, through venture capital firm Greylock Partners, he invested in Pittsburgh-based Aurora Technologies, which later absorbed Uber’s Advanced Technologies Group.

“With valuable strategic partnerships including Toyota and Uber, a compelling business model and an unparalleled track-record of executing against its targets, we believe Joby is well-positioned to create a transformative new human-centered mobility network,” said Hoffman. “Through our venture capital at scale approach, we are committed to Joby’s long-term success as it continues on its journey to revolutionize commutes and drive decades of innovation in human movement.”

In December, Joby Aviation absorbed Uber Elevate, acquiring a suite of software tools focused on multi-modal operations management and demand simulation fed by Uber’s data — capabilities and competencies that will be key as Joby seeks to maintain ownership of its end product rather than sell aircraft to existing operators.  

“For the last decade, we have been laser-focused on one task – developing the best possible technology for this market,” said Bevirt. “But our long-term vision has always been to build a global passenger service, helping a billion people to save an hour every day, while contributing to the protection of our precious planet.

“Today’s transaction lets us look ahead to the next decade and provides us with the resources we need to bring our vision to life.”

In 10 years, Joby’s presentation to investors projects a presence in over 20 cities worldwide with 14,000 aircraft in service generating more than $20 billion in revenue — electric air mobility at scale around the world.

With almost $2 billion in capital on-hand, the Elevate team, and Toyota as a manufacturing partner, Bevirt’s company has everything it needs to achieve his vision of saving a billion people an hour a day . . . including competition.

This article has been updated with additional information from Joby Aviation’s presentation to investors on Feb. 24.

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