Capitalists intervene to rescue flying taxi enterprise in Germany
In a significant turn of events, Lilium, the German startup renowned for developing electric-powered jets, has announced a major financial breakthrough that could see the company re-emerge from insolvency. Following the withdrawal of a main investor, Lilium filed for bankruptcy and embarked on a hunt for new financial backers. However, a consortium called Mobile Uplift Corporation, comprising European and North American investors, has agreed to acquire Lilium's assets and inject over €200 million to relaunch its operations, with a targeted restart in January 2025.
The news comes as a relief to the over 1,000 employees who were made redundant during the crisis but are now set to return as the company prepares for its comeback. Lilium's CEO, Klaus Roewe, has stated that the deal will allow the company to restart its business, a sentiment echoed by critics who have long argued for increased support for young, innovative companies in Germany's economy.
Lilium's electric jets, designed to carry four to six passengers up to 175 kilometers (110 miles) at a speed of 250 kilometers an hour, have attracted 100 firm orders and hundreds more pre-orders. Among the future buyers is Saudi Arabia's flag carrier Saudia, which has signed a deal to buy 50 of Lilium's aircraft with options for 50 more.
The predicament of Lilium has sparked a debate about whether enough support is being given to startups in Germany's biggest economy. Critics claim that a lack of funding has hindered the growth of young, innovative companies in Germany compared to the United States and other countries. The Startup Association warned of "lasting reputational damage to Germany as a location" for the tech sector if Berlin failed to provide support for Lilium.
However, the German parliament's budget committee refused to approve a loan guarantee to Lilium to the tune of 50 million euros in October. This decision, combined with the withdrawal of the main investor, pushed Lilium towards bankruptcy. The Startup Association's concerns seem to have been addressed by the intervention of Mobile Uplift Corporation.
This rescue deal is not the first challenge Lilium has faced. In October, test flights for Volocopter, another Germany-based flying taxi startup, in Paris during the Olympics were scrapped due to delayed certification for its aircraft engine. The predicament of Lilium has highlighted the highly competitive nature of the flying taxi market.
Despite the setbacks, Lilium remains optimistic about its future. The company expects the first manned test flight next year, followed by the first deliveries to customers in 2026. The Sueddeutsche Zeitung daily, however, stated that Lilium failed because the company could not produce decent results even after years of investment and research.
As Lilium prepares for its relaunch, the company's success will be closely watched as a testament to the potential of the German tech sector and the role of private investment in supporting innovative startups. The deal with Mobile Uplift Corporation marks a significant step towards Lilium's goal of revolutionising urban mobility with its electric jets.
Following the acquisition by Mobile Uplift Corporation and the injection of €200 million, Lilium is poised to integrate technology into lifestyle solutions, specifically in urban mobility, as it aims to revolutionize transportation with its electric jets. The return of over 1,000 employees to the company during its comeback in January 2025 signals a merge of innovative technology and employment opportunities in Germany's tech sector.
