Asian Sky Quarterly 2022 Q3

CAPITALIZING
ON THE FUTURE
By Jeremy Chan
The past two years have seen more electric vertical take-off and landing (eVTOL) companies merge with
special purpose acquisition companies (SPACs) than ever before. While SPAC listings offer a feasible way for
budding manufacturers to make their mark in the advanced air mobility industry, other challenges such as
certification and a lack of talent within the AAM sector still linger in the air.
When Joby Aviation went public on the New York Stock Exchange
in August 2021, the company raised more money from the deal than
any electric aircraft maker had ever done before.
The listing helped the company to raise USD$1.1 billion – more than
the USD$857.6 million Archer Aviation pocketed from its listing and
nearly double the USD$584 million Lilium netted in September 2021.
Joby Aviation, an electric vertical take-off and landing (eVTOL) aircraft
developer, went public by merging with a special purpose acquisition
company (SPAC), which is a shell corporation that is listed on a stock
exchange that can merge with or acquire private companies.
There are many reasons why more and more companies are listing
via a SPAC merger. SPACs, or blank-check companies, help earlystage
but high-growth corporations to go public in as little as
eight weeks, bypassing the often tedious traditional initial public
offering process, which can take anywhere between six months
to two or even three years. Investor capital is also relatively safe;
SPACs generally have 18 to 24 months to find a private company
to merge with or acquire, and failing to do so will mean that any
sort of capital that investors have put in is returned to them. The
limited time window also presents an opportunity for the owners of
the target company to negotiate a lower price with the SPAC for the
merger. Being acquired or merging with a SPAC – which is typically
sponsored by prominent business executives – provides the target
company with enhanced market visibility.
Though SPACs have been around for almost three decades, SPAC
listings saw an explosion in popularity during the global pandemic
in 2020 – with 248 SPACs listings to be exact – accounting for
more than half of newly-listed U.S. companies, according to SPAC
Analytics, a data provider. The year 2021 saw even more SPAC
listings, with 613 SPAC IPOs, accounting for 63 percent of all IPOs in
36 | GLOBAL SKY QUARTERLY — THIRD QUARTER 2022