Volocopter, a Bruchsal startup focused in electric vertical take-off and landing (eVTOL) aircrafts, has filed for provisional insolvency after difficulty in finding further funding, marking a setback for the European eVTOL industry.
Founded in 2011, Volocopter gained widespread recognition for its innovative air taxi solutions and was often seen as a frontrunner in the race to bring urban air mobility to life. The insolvency comes amidst mounting financial pressures, highlighting the challenges faced by the nascent sector as it grapples with high development costs and regulatory hurdles.
Volocopter’s financial troubles were disclosed in an official announcement on December 30th, which cited the inability to secure further investment as a key reason for the filing. The application to open insolvency proceedings was filed at the Karlsruhe Local Court on 26 December 2024.
Dirk Hoke, CEO of Volocopter, said in the statement “We are ahead of our industry peers in our technological, flight test, and certification progress. That makes us an attractive company to invest in while we organise ourselves with internal restructuring.”
Tobias Wahl, the administrator for the insolvency proceedings, added that “The company needs financing to take the final steps towards market entry. We will endeavour to develop a restructuring concept by the end of February and implement it with investors.”
The company had previously attracted funding from prominent investors and was poised to transform urban transportation with its flagship VoloCity air taxi. In 2017, they secured €25 million in funding, followed by another €87 million in Series C in 2020.
However despite claiming to have “one of the lowest burn rates in the industry“, the capital-intensive nature of eVTOL development, coupled with the need for extensive testing and certification, appears to have strained its resources beyond recovery.
This news underscores a broader issue in the eVTOL space, where startups face difficulties transitioning from concept to commercialisation. Despite significant progress in technology, securing consistent funding remains a critical challenge.
Interestingly, Volocopter’s insolvency coincides with a glimmer of hope for Lilium, another European eVTOL startup. The Munich-based company recently secured an investor agreement aimed at supporting its business restart.
Founded in 2015, Lilium has focused on developing an electric air taxi that promises regional connectivity alongside urban mobility.
While two of Lilium’s subsidiaries filed for insolvency after failed talks, Mobile Uplift Corporation, a new company backed by a consortium of European and North American investors, has agreed to purchase the remaining operating assets of Lilium – giving it a second wind.
Despite its own struggles, including layoffs of around 1,000 employees and operational downsising, Lilium has managed to maintain investor interest, which could serve as a lifeline for its ambitious projects.
The contrasting trajectories of Volocopter and Lilium allow insight into the volatile nature of the eVTOL market. While Lilium’s funding win suggests there is still hope for the sector, Volocopter’s insolvency is a sobering reminder of the financial and operational challenges that startups face.
As the European eVTOL industry navigates these turbulent times, questions about its scalability and long-term viability are likely to intensify. For policymakers and investors, Volocopter’s downfall might prompt a reassessment of support mechanisms to ensure the industry’s future. Conversely, Lilium’s ongoing efforts could provide a roadmap for navigating these challenges, highlighting the importance of strategic partnerships and investor relations.
Whether the sector can soar to new heights or remains grounded will depend on its ability to address both financial constraints and operational demands effectively.