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.”