Archer goes public at a valuation of $3.8 billion; United Airlines places order for $1 billion worth of eVTOL aircraft

eVTOL air­craft devel­op­er Archer has gone pub­lic in a SPAC merg­er deal with Atlas Crest Invest­ment Corp, at a val­u­a­tion of $3.8 bil­lion.

The deal, which sees Archer become the third eVTOL air­craft uni­corn along­side Joby Avi­a­tion and Lil­i­um, is expect­ed to pro­vide $1.1 bil­lion in gross pro­ceeds and $600 mil­lion in pri­vate invest­ment in pub­lic equi­ty (PIPE) — along with about $500 mil­lion cash held in trust. It is antic­i­pat­ed the result­ing com­pa­ny will be list­ed on the NYSE with the tick­er sym­bol ‘ACHR’. The trans­ac­tion will close in Q2 2021.

Net cash from the trans­ac­tion will be used to fund Archer’s devel­op­ment to com­mer­cial­i­sa­tion of its eVTOL air­craft, which will trav­el dis­tances of 60 miles at speeds of 150mph. A full-scale ver­sion is expect­ed to be revealed lat­er this year, with air­craft pro­duc­tion to begin in 2023 and the first com­mer­cial flights start­ing in 2024.

Brett Adcock, Archer’s co-founder and co-CEO said: “We’re thrilled to part­ner with Atlas Crest to help accel­er­ate our goals of ush­er­ing in the next age of sus­tain­able air mobil­i­ty and enable human micro-explo­ration. By merg­ing efforts with an indus­try inno­va­tor like Atlas Crest and one of the most suc­cess­ful entre­pre­neurs in finance, Ken Moelis, we’re con­fi­dent Archer will trans­form con­sumer trav­el and every­day life.

It has also been revealed that Unit­ed Air­lines — one of the biggest air­lines in the world — has agreed to invest in Archer and place an order for $1 bil­lion worth of air­craft, with an option to buy an addi­tion­al $500 mil­lion air­craft.

Under the terms of the agree­ment, Unit­ed will con­tribute its exper­tise in air­space man­age­ment to assist Archer with the devel­op­ment of bat­tery-pow­ered, short-haul air­craft.

Once the air­craft are in oper­a­tion and have met Unit­ed’s oper­at­ing and busi­ness require­ments, Unit­ed, togeth­er with Mesa Air­lines, would acquire a fleet of up to 200 eVTOL air­craft that would be oper­at­ed by a part­ner, giv­ing its cus­tomers a quick, eco­nom­i­cal and low-car­bon way to get to Unit­ed’s hub air­ports and com­mute in dense urban envi­ron­ments by 2024.

Unit­ed esti­mates that using Archer’s eVTOL air­craft could reduce CO₂ emis­sions by 47 per cent per pas­sen­ger on a trip between Hol­ly­wood and Los Ange­les Inter­na­tion­al Air­port (LAX), one of the ini­tial cities where Archer plans to launch its fleet.

Unit­ed CEO Scott Kir­by, said: “Part of how Unit­ed will com­bat glob­al warm­ing is embrac­ing emerg­ing tech­nolo­gies that decar­bonise air trav­el. By work­ing with Archer, Unit­ed is show­ing the avi­a­tion indus­try that now is the time to embrace clean­er, more effi­cient modes of trans­porta­tion.

“With the right tech­nol­o­gy, we can curb the impact air­craft have on the plan­et, but we have to iden­ti­fy the next gen­er­a­tion of com­pa­nies who will make this a real­i­ty ear­ly and find ways to help them get off the ground. Archer’s eVTOL design, man­u­fac­tur­ing mod­el and engi­neer­ing exper­tise has the clear poten­tial to change how peo­ple com­mute with­in major met­ro­pol­i­tan cities all over the world.”

Com­ment­ing on the Unit­ed Air­lines agree­ment, Adcock added: “We could­n’t be hap­pi­er to be work­ing with an estab­lished glob­al play­er like Unit­ed. This deal rep­re­sents so much more than just a com­mer­cial agree­ment for our air­craft, but rather the start of a rela­tion­ship that we believe will accel­er­ate our time­line to mar­ket as a result of Unit­ed’s strate­gic guid­ance around FAA cer­ti­fi­ca­tion, oper­a­tions and main­te­nance.”

The busi­ness com­bi­na­tion agree­ment comes on the heels of sev­er­al lead­ing strate­gic part­ner­ships for Archer. Last month, Archer announced it had entered into a strate­gic col­lab­o­ra­tion agree­ment with Stel­lan­tis, with a focus on access­ing its low-cost sup­ply chain, advanced com­pos­ite mate­r­i­al capa­bil­i­ties, and engi­neer­ing and design expe­ri­ence.

It also announced an agree­ment with Fiat Chrysler Auto­mo­tives (FCA) last month, with the auto­mo­tive man­u­fac­tur­er already help­ing to design the cock­pit for Archer’s eVTOL air­craft.

Mike Man­ley, Head of Amer­i­c­as, Stel­lan­tis, added: “Unlock­ing the poten­tial of new tech­nolo­gies like urban air mobil­i­ty is a key enabler in cre­at­ing a broad mobil­i­ty ecosys­tem for con­sumers. We are proud to deep­en our rela­tion­ship with Archer Avi­a­tion through this invest­ment and we look for­ward to grow­ing our part­ner­ship to accel­er­ate a path­way to inno­v­a­tive, sus­tain­able trans­porta­tion.”