On The Radar
The voracious appetite of advanced air mobility start-ups for investment shows no signs of being sated, according to a new report from the Lufthansa Innovation Hub. The group’s assessment of venture capital funding across what it defines as the travel and mobility technology (TNMT) sector shows aviation companies grabbing over 50 percent of all investments made in 2020, and then hogging a full 65 percent of cash on the barrel this year.
Acknowledging the paradox of new money gravitating to air transport when the industry has been trampled underfoot by the Covid pandemic, Lufthansa’s researchers broke out the TNMT crowd into five distinct groups of start-ups. Prominent among these were the “new air travel” category, which encompasses would-be air-taxi firms as well as other on-demand aviation services (also including private jet providers like Surf Air and Wheels Up). In 2014, this group attracted $1.413 billion in new funding, and by 2020-21 this had rocketed by a full 359 percent to $6.485 billion.
The “autonomous and electric vehicles” group was an equally impressive investment magnet. Its share of the investment pot for the wider TNMT sector grew by 237 percent from $4.316 billion to $14.565 billion. By contrast, corporate travel management, intercity transport, and tours and activities drew a fraction of that total, with respective 2020-21 pots of just $978 million, $1.1 billion, and $667 million.
“As consumers now consider shared modes of transport, such as ride-hailing, less safe than private modes, investors are shifting their attention away from the long-overhyped shared mobility sector–except for e-scooters and shared bikes, which continued to score mega-rounds as they were one of the only ways to get around town in the pandemic without having to touch or talk to other people,” the report concluded. “Instead, other modes of new transport, e.g. air taxis, private jets, and autonomous vehicles, experienced a tipping point in financing support during the pandemic.”