Vertical Aerospace, a Bristol-based tech company, is on the verge of securing a $850 million deal that will help them launch their first commercial flight. The company, founded by Stephen Fitzpatrick of Ovo Energy, has been developing an all-electric vertical take-off and landing (EVTOL) aircraft for the past decade.
The deal, which is currently in an agreement in principle, will provide the necessary funding for Vertical Aerospace to achieve several key milestones in the next year. This includes further flight testing, certification work, and the start of production for their first full-scale Valo aircraft.
To secure this financing package, Vertical Aerospace has partnered with investment firms Mudrick Capital Management and Yorkville Advisors Global. Mudrick has agreed to extend and add to Vertical’s convertible debt, while Yorkville has offered around $250 million in convertible preferred shares. With this agreement, Vertical Aerospace now has approximately $160 million in working capital for immediate use.
According to Stuart Simpson, the chief executive of Vertical Aerospace, this deal marks a new era for the company. He states, “We have assembled a comprehensive, flexible financing package designed to execute our strategic plan, and materially strengthened our ability to build and certify Valo. We are grateful to Mudrick Capital and Yorkville for their support of our technology, team and mission.
This news comes at a time when there is a growing demand for faster and more environmentally friendly aviation. Many tech companies, including Vertical Aerospace, are racing to reach commercialization stage with their electric flying vehicles.
Vertical Aerospace plans to build a new factory at Cotswold Airport in Gloucestershire, adjacent to their existing flight test center. This facility will be capable of producing around 25 VX4 aircraft per year. The company has stated that their aircraft could be ready for commercial use by 2028 if they secure the necessary financing.
Jason Mudrick, the chief investment officer of Mudrick Capital Management, shares his confidence in Vertical Aerospace, stating, “We have backed Vertical Aerospace since 2021 because we believe they are building the most technically advanced aircraft in the industry. This financing package is designed to give Vertical ample runway and the financial foundation it needs to achieve certification, enter commercial service, and realize the substantial value we see in this business. We are proud to be deepening our commitment at this pivotal stage.
In May of last year, Vertical Aerospace made history by successfully piloting a VX4 prototype flight across the UK countryside. Dómhnal Slattery, the chairman of Vertical Aerospace, emphasizes the importance of this financing package in supporting the company’s future growth. He states, “This financing package provides immediate working capital and provides management with flexible tools to access additional capital in a manner that promotes capital efficiency, as we progress through our certification milestones. We are more excited than ever about Vertical’s prospects.