LIFT Aircraft has a current pre-money valuation of $189 million. The company has not generated any revenue. When compared with other electric vertical take-off and landing startups and growth-stage companies, LIFT’s valuation is very high. LIFT is hoping each craft will generate up to $1.3 million per year in revenue. The company expects to produce 35 crafts this year. However, investors might not end up seeing much of a return on their investment, especially if the company does not meet its expected revenue growth.

In 2021, the global electric vertical take-off and landing (eVTOL) aircraft market was valued at $8.5 billion. It is expected to grow by 15.3% each year and reach $30.8 billion by 2030. As of 2021, North America accounts for 34.5% of market share, or $2.9 billion. The market might seem small when compared to the airline industry market, which stood at $471 billion in 2021. However, the growth opportunity in eVTOL is massive. Although the COVID-19 pandemic took a toll on the aviation industry, the eVTOL market seemed to sustain its growth. 

Several factors contribute to the market growth, including the increased awareness of climate change and the need to reduce CO2 emissions, the need to deliver medical supplies for EMS services to remote areas, and the need for quicker alternative transportation methods. It is expected that 68% of the world population will live in urban areas by 2050. This poses a problem, as car traffic is likely to increase along with the population density. So it’s likely that the growing population will seek alternative transportation options like eVTOL flights. Overall, LIFT Aircraft is operating in a rather small market with high potential growth.

LIFT Aircraft was founded in 2017 by CEO Matthew Chasen. According to his LinkedIn, he seems to have both engineering and entrepreneurship experience. Chase graduated from the University of Texas at Austin with a bachelor of science in mechanical engineering and a master’s in business administration. For a few months while he was at UT, Chasen was a researcher at NASA’s Langley Aerospace Research Summer Scholars Project. After that, Chasen worked as an engineer at Boeing for four years, where he worked on multiple aerospace projects. Chasen also founded two companies: uShip (an online shipping marketplace) and Hitch (a ridesharing platform). Although Chasen doesn’t seem to be the current CEO of either of these companies, he still seems to be involved as a board director and chairman, which could impact how much time he devotes to LIFT. But overall, Chasen’s entrepreneurial and aerospace experience makes him a great fit as the founder and CEO of LIFT.

The rest of LIFT’s team includes a chief of engineering, chief financial officer, marketing director, business development director, and flight operations director. LIFT’s team is diverse in skills, which should help the company bolster product development and achieve its goals.

LIFT Aircraft’s main differentiator is its focus on aerial micro-mobility — meaning short-range travel. The company is developing HEXA, a wingless, hover-optimized, single-seat eVTOL (electric vertical take-off and landing) aircraft that can travel for up to 15 miles in 10 minutes at a speed of up to 90 miles per hour. Competitors Archer Aviation and Joby Aviation can travel further — up to 60 miles and 150 miles at 150 mph, respectively. But while LIFT might fall behind when it comes to speed and range of travel, it is focusing on a sizable chunk of the travel market. In 2017, data showed that nearly 60% of all vehicle trips were less than six miles. In 2017, the average commute to work in the US was 11.5 miles. 

Although most eVTOL aircraft manufacturers aim to make their aircraft autonomous, humans still need to be trained to take them off the ground. LIFT Aircraft will offer training using a virtual reality simulator. Other eVTOL companies use CAE for training. So LIFT having its own training system can make it easier and cheaper for customers to operate its aircraft. That’s a big point in LIFT’s favor.

LIFT’s pay-per-flight business model is more expensive than other eVTOL flights. LIFT plans to charge $249 per eight to 15 minutes. Archer Aviation costs only around $40 for a flight of the same length. When it comes to the price of the aircraft, LIFT aircraft are average. The HEXA’s initial cost is $495,000. ZEVA Aero and Doroni are developing single-person aircraft that cost $250,000 and $135,000 to $150,000, respectively, while bigger eVTOL crafts can cost up to $1 million. 

LIFT’s technology is very similar to that of its competitors. This combined with its high flight prices give it a disadvantage against cheaper competitors. But LIFT’s HEXA is a high-quality craft, with 18 overhead electric motors and propellers. The HEXA can still fly and land even with six motors disabled. HEXA is also patented, which increases its defensibility. Overall, LIFT is well-differentiated.

LIFT Aircraft is a pre-product company with no proof of concept and no revenue yet. However, the company has many achievements. LIFT has tested more than 700 flights and has gained Federal Aviation Administration Part 103 approval. This approval allows LIFT to launch pay-per-flight operations with no pilot’s license required. Although the company has no users or paying customers yet, there are more than 15,000 people on the waitlist to fly LIFT’s first electric vertical take-off and landing (eVTOL) aircraft, HEXA. The company also has more than 4,000 prepaid reservations. LIFT has submitted an application for the Strategic Funding Increase program, which offers small businesses $3 million to $15 million in funding in order to establish a relationship with Air Force and Space Force end users. According to LIFT’s raise page, the company has letters of intent for more than 100 aircraft. LIFT is also developing its first vertiport — an airport for VTOL aircraft — in Austin, Texas as a flight launch and training location.

LIFT has raised more than $8.5 million in the past, which is a huge accomplishment for a four-year-old startup. However, the company has only $1.8 million on hand, according to its most recent financials, which means it is burning through cash quickly. This is not always a bad sign, especially for deep technology companies that need to spend a lot of capital on research and development. But it still means that the company needs to secure funding in order to meet its goals, such as launching a network of vertiports by 2025.  

Overall, LIFT Aircraft has achieved good traction and secured an impressive amount of funding. But it is important to keep in mind that its letters of intent and waitlist are non-binding agreements, making the company’s traction somewhat tenuous.

LIFT Aircraft comes with a high risk profile. The electric vertical take-off and landing (eVTOL) market, though new, is highly competitive. Although LIFT has already raised more than $8.5 million, the company will still require a lot of time and capital to build, maintain and charge its fleets of aircraft. Joby Aviation, for example, was founded in 2009 and has raised more than $1.6 billion with partnerships from Uber and Toyota. But its aircraft are still not available in the market and aren’t expected to start operating until 2024.

The eVTOL industry also faces a lot of regulatory issues. The company still needs to obtain Federal Aviation Administration (FAA) approval for commercial use. And because the eVTOL industry is so new, the FAA has no consistent regulatory standards, which means approval and regulation could be a long and complicated process. EVTOL companies like LIFT also have a high likelihood of facing legal issues if the aircraft fails to perform. New York Airways, a helicopter service, went bankrupt in the 1970s after a fatal accident. Although LIFT takes safety precautions and plans to equip its aircraft with a ballistic parachute system in case of failure, there is still a chance failure could occur with any new invention.

It remains uncertain whether LIFT Aircraft will be able to deliver its aircraft and grow its fleet to generate revenue. The company is planning to manufacture 35 aircraft by 2022 and launch in 28 markets by 2025. However, even a bigger company like Joby Aviation spent more than a decade developing its electric vertical take-off and landing (eVTOL) aircraft and still has not launched them to this date. This suggests LIFT might not be able to go to market as soon as expected. If it takes too long, the company could face financial difficulties. 

LIFT also lacks capital for a company that requires heavy spending on manufacturing, research, and development. As of this writing, LIFT has only $1.8 million in cash on hand and more than $7 million in long-term debt, according to its most recent financials. LIFT may need more funding in the future, which could dilute investors’ shares. If the company doesn’t secure funding or generate revenue soon, its cash outflow could prove unsustainable. 

Investing in the eVTOL industry is risky in general. The market is highly competitive, and the industry is highly regulated. Should an accident occur, LIFT could face severe legal and financial repercussions.

Although the electric vertical take-off and landing (eVTOL) market size is small, it has huge potential, which is great news for LIFT Aircraft. There is already a lot of support for the eVTOL industry. In early 2020, Toyota invested around $394 million in the eVTOL industry, and Volocopter attracted about $241 million in investment. Once LIFT has a proven product, it could receive similar support. And given that car traffic is likely to worsen alongside swelling urban populations — and aviation has proven to be the safest way to travel — it seems likely that eVTOL aircraft will continue to grow in popularity. LIFT also has potential because it is targeting both business-to-business and business-to-consumer channels. The company offers services to individual customers to avoid traffic congestion while also providing aircraft for firefighting, military, and medical emergency departments, which could be a huge revenue stream for the company.

LIFT seems to have a clear business plan. It has begun developing its vertiport in Austin, Texas to offer introductory flights, and the company is planning to expand in the future. LIFT also seems to have good traction from customers on the waitlist, though this is not binding. LIFT has also received attention from Jeff Bezos, who tried LIFT’s HEXA aircraft back in 2020. The positive attention offers the company some free marketing and could attract more customers. So, although it might take time for the company to start seeing results, LIFT could start generating a lot of revenue once its aircraft become available on the market.

LIFT Aircraft is developing electric vertical take-off and landing (eVTOL) aircraft. This deep technology startup has tested more than 700 flights and raised more than $8.5 million in the past. Its first aircraft model, HEXA, is patented and has been approved by Federal Aviation Administration Part 103. LIFT is entering a competitive market that has huge potential for growth. The company has received a lot of interest in the form of non-binding letters of intent and a long waitlist. Although LIFT’s founder does not appear completely dedicated to the team, its members seem to have a well-rounded skill set. 

But LIFT has some challenges ahead of it. There is a lot of competition from eVTOL companies that have more capital and lower-priced products. Its planned offerings seem similar to competitors’. LIFT also lacks cash. This could prove risky, as the company needs to continue research, development, and production. The industry is highly regulated, and the company could face dire consequences if its aircraft results in an accident. And without any revenue, the company’s $189 million valuation is too high. Overall, LIFT Aircraft has been rated a Neutral deal.

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Analysis written by Yasmin Sharbaf on November 19, 2021.