Dimming Lights, Flying Uber & Inflation 🚁

Turning to valuations (graph below): 

• Median Series A valuations are slightly down to $60 million from $64 million in the opening months of 2022, with average valuations for the stage dropping from $106 million to a far more modest $81 million.
   
• Series B data here is the most fascinating. Average round valuations for the stage dipped. However, median round valuations went up. Not by much — just $20 million — but perhaps we’re seeing more late-stage capital crowd the Series B market.
   
• Series C data is similar to Series A. Average and median valuations for Series C investments in the U.S. startup market fell sharply at the start of 2022. From a near-unicorn average valuation of $884 million, the first two months of the year were valued at a far lower $467 million. That’s a huge change and a strong indicator of how those price shifts could impact startup valuations, especially among companies that are on a clear path toward an exit. 

There’s a new industry in the making - flying taxis. 

Between the billions of dollars in capital, SPACs and test flights, there were countless companies touting their mettle to bring us one step closer to the commercialization of air taxis. Globally there are 73 companies in this nascent sector. 

Some of the startups showing promise are: 

Tarrafugia

• Founded: 2006
• Location: Waltham (United States)
• Funding: $6 million

Lilium

• Founded: 2015
• Location: Wessling (Germany)
• Funding: $375 million

BETA

• Founded: 2017
• Location: South Burlington (United States) 
• Funding: $368 million 

Autonomous Flight

• Founded: 2017
• Location: London
• Funding: $7 million

And there are several obvious reasons why the competitive landscape of this aircraft market is going to expand.

Let’s start with demand. The global eVTOL (Electric Vehicle Takeoff and Landing) aircraft market is projected to grow by 30.3% CAGR between 2019 and 2030. Main drivers of this demand are rising traffic congestion and lower travel times associated with flying to places instead of driving. 

Then there is the urgency factor. Flying cars can be used to cater to a number of urgent slash life-and-death kind of situations such as search and rescue, evacuation during earthquakes, cyclones or war, getting on time to the airport or for an important meeting, food delivery, medical emergencies, etc. Some companies are also exposing the idea of ride-sharing. 

Given the large addressable market of urban air mobility the expansion and competition will clearly benefit the several space.

Now let’s talk jobs. 

This new industry is a hotbed for jobs. A McKinsey study predicts that flying taxi space will increase the requirement of pilots by over 200,000 in the next 5 years, along with an equally big demand for cabin crew and other airline staff - probably, a good time to start applying to pilot training schools.

The only caveat here is the design. 

Several questions need to be answered to figure out how to combine design and functionality in eVTOLs. What performance differences will result from these design differences? What economic factors will be important as the industry scales once the glitz and glamour of early demonstration flights have passed?

At this point, experimental prototypes pay little attention to real-world demands like payload and weather condition reliability, but if riders are going to save time getting to the airport for a long-distance flight, they need to be able to bring their luggage, and they need to count on the eVTOL to fly in the same weather conditions that jets do.

We also can’t forget about noise pollution. 

While eVTOLs will improve aviation’s carbon footprint, the urban environments where these aircraft are most useful are extremely noise sensitive. And nobody wants more noisy vehicles passing across their windows all the time. 

As the average gas price reaches $4.32 per gallon this week, Americans are cutting back on travel.  At the same time, rents are steadily increasing as people return to office and cities driving up demand and rents to record heights. In cities like New York and Miami, rents went up 25% or more within a year.

A new analysis from The Urban Institute, shows in the typical metropolitan area, rents went up 15% this year compared to a year prior. Even before the conflict in Ukraine, gas prices were up nearly 30% from February 2021. Meanwhile, hourly wages rose only 5% in 2022.