Joby Aviation said it has finalized a new $180-million equity investment led by Baillie Gifford, allowing the eVTOL manufacturer to accelerate early production of its first electric aircraft.
The transaction closed May 5, 2023, following a public offering that saw Baillie Gifford — an early investor in Joby, as well as in Tesla and Amazon — capture for its clients nearly 44 million common shares in the Silicon Valley aviation startup.
“We welcome the opportunity for us to continue supporting the team at Joby as they move into a manufacturing scale-up phase and delivery of aircraft into service,” a Baillie Gifford spokesperson said in a statement. “It is important as long-term investors — even more so in a challenging environment — that we maintain our approach of backing transformational companies to build new growth industries.”
Baillie Gifford is a private partnership based in the U.K., and has held investments in Joby since 2020. Its additional $180-million equity investment was unprompted, according to Joby.
“We are comfortable with the robustness of our balance sheet and were not looking to raise capital,” said Katie Pribyl, a spokesperson for Joby. “However, when Baillie Gifford … reached out, looking to increase their investment on behalf of their clients, we felt it was the right opportunity with a high-quality investor and a straightforward structure. Their vision for sustainable transportation matches ours very well.”
As a result of the deal, Baillie Gifford manages for its clients about 8% of Joby’s outstanding shares. This new investment allows Joby to capitalize on a recent contract extension with the U.S. Department of Defense (DoD) and generate revenue as it pursues type certification with the U.S. Federal Aviation Administration (FAA).
“Additionally, we will be able to advance our production plans without impacting the funds we’ve committed to our aircraft certification program,” Pribyl said.
Joby plans to roll out its first company conforming aircraft in the first half of 2023, and to fly with a pilot on board before the end of the year. The company said it remains on track to start commercial operations in 2025, and touted its financial standing in a recent Q1 update.
“With more than $1 billion in funds available, we are comfortable with the robustness of our balance sheet,” Pribyl said. “We are focused on stage four of the certification process where we design, develop, and dry run the testing we described in stage three, ahead of entering formal for-credit testing with the FAA.”
Joby cited $978 million on its balance sheet at the end of Q1 2023, excluding the additional $180 million from Baillie Gifford. This arrived on the heels of a $55 million contract extension with the DoD that includes the provision of up to nine aircraft. The first two aircraft are to be stationed at Edwards Air Force Base in Southern California, starting in early 2024.
Joby intends to use the partnership to gather valuable operations experience prior to type certification. In total, the DoD contract with Joby is valued at up to $131 million.
U.S. Air Force pilots have already remotely piloted a Joby test vehicle at its manufacturing facility in Marina, California. They are said to have been the first Air Force personnel to fly an eVTOL as sole pilot-in-command through the full flight envelope. This includes the transition from vertical to wingborne flight.
In the meantime, Joby confirmed it would consider various financing options for its aircraft, including sale and leaseback agreements — the move was initially reported by The Air Current.
“This would be no different from the funding we might seek to support infrastructure or manufacturing development and, in many cases, is actually required by regulation,” Pribyl said. “To be clear, we’re not talking about selling aircraft to individuals. It is still absolutely Joby’s intention to operate these aircraft.”
The company also sought to stifle chatter about the perception it is veering away from its vertical integration strategy. Some observers have pointed to an agreement with Toyota to manufacture Joby’s powertrain and actuation components, as an apparent change in course.
“We don’t view this as a change in direction — vertical integration remains central to our business strategy,” Pribyl said. “We have always sourced select parts from third parties where they are able to meet our needs, such as working with Toray on carbon composites and Garmin on avionics. In this instance, as part of our long-term manufacturing partnership with Toyota, it was a natural fit for them to manufacture certain powertrain and actuation components that we designed in-house.”
Toyota is a major external shareholder in Joby, having invested around $400 million. It also consulted on the layout of Joby’s pilot production facilities and helped solve individual manufacturing challenges across various aircraft systems, Pribyl said.
“Toyota excels at efficient scale manufacturing and production quality, and we are very happy to be working with them on the design of our future factory as well,” she added. “Where there are parts available off-the-shelf, we do consider them. It’s just that in the majority of cases, the right parts either didn’t exist or we would have to make critical trade-offs in order to incorporate them.”
