TECH IN THE NEWS

Transitions — The Trump transition team plans to roll back Biden EV subsidies, emissions standards, impose tariffs on battery materials and redirect funds to natsec.

Soft Power — President-elect Donald Trump and CEO Masayoshi Son announced that SoftBank will invest $100B in the US over four years in a boost to the economy.

Interest Rates —This week the Federal Reserve, BoE, and BoJ are all set to announce interest rate decisions. The Fed is widely expect to cut .25bps and the BoE and BoJ are expected to hold rates steady.

Ripple Effects — Ripple Labs’ RLUSD stablecoin launches today on major exchanges, fully backed by USD deposits, government bonds, and cash equivalents. It aims to facilitate cross-border payments and multi-chain DeFi.

AI XXX — Texas senator Ted Cruz is pushing for the House to sign his bill seeking to criminalize AI porn and require social media companies to remove posts within 48 hrs.

COMPANIES TO WATCH

CoreWeave — The NJ-based $23B-valued data center company confidentially filed for an April IPO with Morgan Stanley, Goldman, and JPMorgan; it expects $2B revenue this year.

Databricks — The SF-based data platform is raising $9.5B at a $60B valuation led by Thrive Capital, with a16z, Insight, and GIC participating.

Finny — The YC-backed startup is using AI to match financial advisors with prospects. It launched an MVP in May and has now raised a $4.2M seed co-led by Maple and HNVR. Over six months revenue rose 150% p/m, and it hit 40+ clients.

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THE HOTTEST THING IN TECH
Air Taxis Market Update

Autonomous Mobility Update Part 2 — The Air Taxi Market

The electric vertical takeoff and landing (eVTOL) aircraft or air taxi market has seen some movement since we last covered it. Predicted to revolutionize urban and regional transportation, the industry is still in flux as companies struggle to turn the idea of flying taxis into a real business. Q4 of 2024 has seen a mix of promising progress and sobering challenges that are important for anyone considering potential investment and innovation opportunities in this potentially lucrative vertical.

The Good News

In October, the FAA cleared the way for eVTOLs to operate in US airspace with a historic rule establishing a new category of aircraft called "powered-lift" and guidelines for pilot training and operating rules. This was the first time in 80 years a new aircraft category has been approved in the US, paving the way for 2025 lift-offs.

Only The Strong Survive… 

Several eVTOL startups are facing financial challenges in this cash intensive sector. German startup Lilium, ran out of runway and filed for insolvency in October, halting production of its aircraft slated for a US launch in 2026. Volocopter has teetered on the brink of insolvency for months, and Vertical Aerospace narrowly avoided bankruptcy by securing a $50M lifeline from Mudrick Capital, its largest creditor.

Another key player, Joby Aviation, is actively raising capital and preparing for commercial launch in 2025. Joby recently launched a public offering to sell up to $300M of its shares, adding to the $500M it raised from partner Toyota in October. The funds will be used to support 2025 air taxi launches in major cities like New York, Los Angeles, Dubai, and Abu Dhabi in partnership with Delta Air Lines and Uber.

Meanwhile, rival Archer Aviation has obtained FAA approval to launch commercial operations in 2026, and is attempting to shore up its cash flow by expanding its focus to include military applications. It just signed an exclusive deal with defense contractor, Anduril to develop next-gen military aircraft, with its first product to be a hybrid propulsion VTOL aircraft designed to meet DoD requirements. To support this pivot, Archer raised an additional $450M from Stellantis, United Air, Wellington and 2PointZero, a subsidiary of UAE giant IHC, bringing its total raised to $2B. 

Big Industry Joins The Game

eVTOLs are also gaining increasing interest from Aerospace and automotive investors and industry players. Boeing’s Wisk subsidiary just bought Verocel, a veteran aerospace software company to boost software safety for its self-flying eVTOL. Airbus is also engaged in testing its own full electric CityAirbus air taxi prototype with FAA certification expected around 2025. United Airlines has invested in Archer.

Hyundai’s electric air taxi spinout startup Supernal just relocated its global HQ from DC to California and aims to launch a US air taxi service in 2028. As previously mentioned Toyota is partnered with Joby and is a key stakeholder in the company. There is public and investor interest in Tesla exploring air taxis, given its Robotaxi strategy and SpaceX ties. Musk has discussed the complexity and high capex involved, hinting at a long-term interest but without any immediate plans.

Emerging Markets

Emerging markets are also in on the action. China, South Korea and the UAE have all implemented policies to support eVTOL operations. India's ePlane just last week raised a $14M Series B round as it plans to commercialize its air taxi in 2026 boosted by government interest in the sector (and a huge population). In China EHang is the first company to receive a commercial operation permit for passenger-grade AAVs. It has already conducted numerous air taxi service pilot programs in cities like Guangzhou. Other local startups are vying for the Chinese market, as well as major Chinese tech companies. Xpeng’s X2 craft is now taking orders for 2026 shipping. 

Clear Skies? The Future Outlook

While eVTOL companies have raised substantial funding since 2019, the pace of investment has slowed, and achieving profitability remains a distant goal. Regulatory delays, a volatile economy, and geopolitical tensions have further hampered progress, pushing back the timeline for commercial flights. Companies like Archer and Joby, backed by major investors, are obviously better positioned to navigate these challenges, but they too face significant cash burn in the coming years. 

It could also pay to watch out for synergistic market plays like the Verocel safety software play and AI navigation technology companies that could benefit from this growing market. More companies may have to explore adopting production-focused models like Archer, and pursuing mergers as potential solutions. Despite the hurdles and short-term volatility, some analysts remain optimistic about the future of the air taxi market, projecting significant revenue opportunities in the coming years. 

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