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The financial data and software company PitchBook predicts that eVTOL air taxi startups will receive a record level of venture capital (VC) investment in 2020.
The prediction is contained within PitchBook’s “2020 Emerging Technology Outlook,” released in early December. The report provides predictions for trends in mobility, including outlooks for air taxi and autonomous vehicle startups. According to the report, positive previous investment trends could signal further growth in 2020.
Because of the potential of eVTOL air taxis to dramatically lower the cost of urban transportation while reducing emissions and traffic congestion, air taxi startups are primed for nontraditional venture investors, PitchBook says. In fact, the company believes that the urban air mobility space has the potential to take over a large segment of market share from both ground-based transportation services and the helicopter industry.
According to the report, “these industries combined represent a massive market of approximately $1.1 trillion in annual spending. Even assuming a small share of this market could represent substantial returns for early investors.” PitchBook predicts that in the early phase of adoption, electric air taxis will primarily displace helicopter services because of the lower operating and maintenance costs of eVTOL aircraft compared to helicopters.
However, PitchBook is skeptical that most eVTOL developers will be able to meet their targets for deployment in the mid-2020s, due to the significant technological and regulatory barriers associated with this potentially disruptive industry. According to PitchBook, the cost of developing and certifying a new light aircraft can reach $1 billion or higher, but only $438 million total VC has been invested in the space since 2009.