Vertical Aerospace has a plan to capitalize on Europe’s defense tech moment

Russia’s warfare successful Ukraine and President Donald Trump’s reluctance to enactment NATO allies has led to a boost successful backing for European defence tech. And crossed industries, startups are leveraging the opportunity.

One specified institution could beryllium UK-based startup Vertical Aerospace, which is processing eVTOL (electric vertical takeoff and landing) craft chiefly for aerial taxi operations. The startup has much than 1,500 pre-orders for its VX4 eVTOL from customers similar American Airlines, Japan Airlines, GOL, and Bristow.

Now, Vertical is speaking much publically astir the opportunities successful defence and logistics. On Monday, the Vertical took its archetypal nationalist measurement by announcing a program to make a hybrid-electric variant of its VX4.

“We ever knew this craft would beryllium defense-capable due to the fact that of the quality of it,” Vertical Aerospace CEO Stuart Simpson, told TechCrunch, noting the hybrid mentation of its eVTOL promises a scope of up to 1,000 miles. That’s a 10-fold summation connected the eVTOL. 

VTOLs marque for bully defence craft due to the fact that they person debased sound and vigor signatures. They tin besides beryllium deployed autonomously oregon remotely, capabilities Vertical says its craft volition 1 time have. Vertical has partnered with Honeywell, which is developing autonomous craft for the U.S. military, to make the formation power and craft absorption systems for its vehicles.

Vertical’s hybrid-electric strategy isn’t unsocial to the startup. In December 2024, California-based Archer Aviation announced a new portion dedicated to defense alongside plans to enactment with weapons shaper Anduril to physique a hybrid-electric craft for captious subject missions. The quality garnered Archer different $430 cardinal successful equity from existing investors. 

And portion Simpson insists that Vertical isn’t coming retired with the quality of its hybrid conveyance present retired of opportunism – the startup has been moving connected its hybrid craft successful stealth for 18 months – it’s surely bully timing.

The European defence tech scenery has shifted implicit the past mates of years arsenic the bloc prioritizes home-grown solutions. Last year, $1 cardinal successful VC was invested into the manufacture for the archetypal time, a fivefold summation since 2018. Specialist defence tech funds person besides cropped up, similar the €1 cardinal Nato Innovation Fund and the Estonian SmartCap €100 cardinal defence fund. Lithuania is poised to walk 5% to 6% of its full GDP connected defence spending, including into startups via its sovereign VC Coinvest Capital. 

Against this backdrop, Vertical finds itself fundamentally without European rivals successful the eVTOL industry. At the adjacent of 2024, Germany’s Volocopter filed for bankruptcy, and Lilium ceased operations. Vertical says this makes it uniquely positioned to conscionable the increasing defence needs crossed Europe. And now, with its upcoming hybrid-electric capabilities, it could go a cardinal subordinate amid increasing defence budgets and accrued absorption connected sovereign concern capacity. 

To decently prehend the moment, though, Vertical volition apt request to rise much capital. The startup has raised $468.8 cardinal to date, chiefly done its reverse merger successful 2021 and consequent PIPEs, according to PitchBook. More recently, successful January, Vertical raised $90 cardinal done a 2nd nonstop nationalist offering. 

That puts Vertical good beneath competitors Joby Aviation (raised $2.82 cardinal to date), Archer Aviation ($3.36 cardinal raised), and Beta Technologies ($1.15 billion). 

“We’ve been spending astir $100 cardinal a year,” Simpson said. “Our competitors person been spending $400 to $500 million. We’ve been developing, wrong our $100 cardinal walk envelope, this hybrid. We are incredibly businesslike and focused.”

Archer’s operating expenses successful 2024 did apical $500 million, a chunk of which went towards resolving a quality with Boeing and Wisk Aero. Joby’s operating expenses past year astir reached $600 million. 

That said, some Archer and Joby are investing heavy into manufacturing to beryllium capable to soon nutrient their eVTOLs astatine scale. Simpson said Vertical is not yet moving to ramp up manufacturing earlier it finishes certification, which it expects to implicit successful 2028. 

“You tin pain a batch of wealth by going to physique and get a load of robots,” Simpson said. “This is not thing you privation to robotize. These are highly, highly complex. What you request to bash is recognize however you physique them, and then…you physique a fewer 100 of them manually. Then you simplify, standardize, and automate.”

Vertical aims to person its archetypal certified pre-prototype for its VX4 eVTOL built adjacent year, with plans to physique different fistful aft that.

“The hybrid powerfulness bid volition beryllium integrated into our adjacent procreation VX4 variant with formation investigating planned to commencement adjacent year,” Simpson said Tuesday during Vertical’s first-quarter net call. 

Vertical’s formation tests are lone done with a aviator due, successful part, to the stricter quality of UK formation regulations. Joby and Beta person already done piloted flights, but Archer inactive hasn’t – though it plans to bash truthful imminently. 

When it comes to customers for Vertical’s subject offerings, the institution hasn’t secured immoderate conscionable yet. 

“We’ve had a batch of deep, meaningful discussions with authorities agencies and customers,” Simpson said. “But we’re the lone European subordinate successful the space. So it gives america a truly unsocial position.”