Vertical Aerospace goes public, $300M in total proceeds raised

Avatar for Jen NevansBy Jen Nevans | December 17, 2021

Estimated reading time 5 minutes, 35 seconds.

U.K.-based Vertical Aerospace has become the most recent eVTOL developer to be a publicly traded company on the New York Stock Exchange (NYSE), after shareholders of Broadstone Acquisition Corp., a special purpose acquisition company (SPAC), approved the merger on Tuesday.

Vertical Aerospace
Vertical Aerospace’s ordinary shares started trading on the New York Stock Exchange yesterday under the ticker symbol EVTL, after shareholders of Broadstone Acquisition Corp., a special purpose acquisition company (SPAC), approved the merger on Tuesday. Vertical Aerospace Image

The business combination makes Vertical the fourth major eVTOL developer to go public via SPAC, following Joby Aviation in August, and Lilium and Archer Aviation in September.

But just how lucrative the deal is for Vertical is unclear. According to a company-issued press release, the total proceeds raised were US$300 million, and a company representative confirmed with eVTOL.com that the figure includes the previously announced $200 million in convertible senior secured notes from Mudrick Capital Management in October, as well as $94 million in total private investment in public equity (PIPE) associated with the SPAC merger.  

Vertical has yet to confirm how much it will receive of Broadstone’s $305 million cash held in trust, but SEC filings suggest that the amount will be very low, with up to 95% of Broadstone’s shareholders choosing to redeem their shares rather than remain invested in the combined company.

Mass shareholder redemptions have become common in the SPAC market. Vertical’s merger with Broadstone comes less than a month after Volocopter was said to have canceled its own planned SPAC deal — reportedly telling its Seedmatch investors that the prospect of mass redemptions was a main reason for the cancellation.

Archer’s 48.5% in shareholder redemptions, and Lilium and Joby’s 65% were all high compared to initial expectations, but Vertical’s even higher redemption rate suggests that SPACs are no longer the promising funding vehicle for eVTOL companies that they were early in 2021.

However the impact, Vertical remains optimistic about the deal, stating the total funds raised is still in excess of what the company reportedly said it needs to certify its five-seat VX4 air taxi by 2024, develop a manufacturing facility, build out its commercial platform, and scale production. Vertical put a price tag of $250 million on those projects — even though some industry observers expect it could take $1 billion or more to just certify an eVTOL aircraft alone.

Vertical has secured relationships with major names including American Airlines, Avolon, Rolls-Royce, Honeywell, Microsoft’s M12, Rocket Internet, 40 North, and Kouros, and has said plans to leverage its strategic partnerships to reduce its own cash outlay.

Stephen Fitzpatrick, founder and CEO of Vertical Aerospace, called the business combination a “landmark moment” for the company, which has secured a total of 1,350 conditional pre-orders of its eVTOL aircraft, worth about $5.4 billion — what it believes to be the largest pre-order book in the industry.

“We have global leaders in aviation as partners and a world-class team that can make zero emissions flight a reality for millions of people around the world,” he said. “It is fantastic to reach this milestone, and I am so proud of what the team has achieved.”

Vertical’s ordinary shares started trading yesterday under the ticker symbol EVTL, closing the loop on a deal that was first announced in June — before the craze around SPAC deals started to fizzle. To mark the 118th anniversary of the Wright Brothers’ first flight, Vertical rang the opening bell on the NYSE this morning.

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