Joby Aviation Nears SPAC at a $5.7 Billion Valuation

By McKenzie Carpenter Monday, February 15, 2021

The EV (electric vehicle) market is rapidly expanding as big companies are researching ways to integrate electric vehicles into the mass market. The EV market does not just apply to ground transportation; it also applies to businesses developing electric vertical takeoff and landing, or eVTOL, transportation, such as piloted and driverless rideshare vehicles, drones, helicopters, and even airplanes. Joby Aviation is just one business of many developing an eVTOL, which is currently working to secure a deal with a special purpose acquisition company or SPAC.

Joby Aviation eVTOL air taxi.

Joby eVTOL SPAC Deal

Joby Aviation is a company currently developing an eVTOL, essentially a flying car and other flying modes of transportation. The reported deal in the works is between the business and Reinvent Technology Partners, or RTP on the New York Stock Exchange (NYSE) — a $1.27 billion company. The investment partners leading RTP are LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus. If the eVTOL business and the merger company are able to work through the details, the eVTOL company will go public under the RTP name. The business would then be valued at $5.7 billion.

The SPAC deal between the eVTOL business and RTP would be a huge accomplishment for the investors in the business. The eVTOL business has several investments, with some of the big investors being Toyota (which is tackling the EV industry as well), Intel Capital, Uber, and JetBlue Technology Ventures. With all of the investments, the company has raised $796 million.

Furthermore, since news of this deal between the business and RTP was announced last Friday, RTP stock has gone up 6.23%.

About the eVTOL Market

The eVTOL market is another example of businesses searching for ways of more sustainable resources to help reduce pollution. The global market for electric aircraft is worth an estimated $102.5 million in 2020, and it could reach $134.7 million by 2027 — CAGR of 4%. In addition, Morgan Stanley reports that the eVTOL industry could reach $1.5 trillion by 2040. Some businesses have already taken larger steps in the eVTOL market. United Airlines recently invested $1 billion in another eVTOL company.

The purpose of an eVTOL varies from cargo transport to commercial transport, but another sector of the industry is emergency response. With an eVTOL in an urban area, helicopter take-off times are diminished greatly, going from minutes to seconds.

That said, the problems that come with an eVTOL are taking the programs to a mass scale at an affordable price. Additionally, receiving certification from the Federal Aviation Association, or FAA, has proven to be a challenge as well.

Final Conclusions

If the business deal between Joby and RTP can close, then it will be another step forward for the eVTOL market. It will create favorable opinions among other investors and may perpetuate the future success of the eVTOL market.

About the Author

Headshot of McKenzie Carpenter

McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.

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