After experiencing highlights such as successful test flights, significant financing, and the ringing of the bell in the US stock market, well-known eVTOL startup Lilium has come to the brink of bankruptcy.
On October 24th, Lilium announced that although the company continues to raise funds, it is still unable to raise enough additional capital to maintain the normal operation of its two main subsidiaries, Lilium GmbH H and Lilium e Aircraft GmbH. The management of the subsidiary has notified the company that they must apply for bankruptcy in accordance with German law and, in the process, apply for Germany's self-management procedures.
Lilium stated that its subsidiary's application for bankruptcy and self-management procedures in Germany may lead to Lilium's eventual delisting from the NASDAQ exchange or suspension of its stock trading. After the announcement, Lilium's stock price plummeted by 61.5%.
Lilium headquarters was established in 2015 and is located in Munich, Germany. Its main product is a fully electric vertical takeoff and landing jet aircraft called Lilium Jet.
Lilium was once a capital darling in the eVTOL field and also received investment from Tencent. In 2021, Lilium completed its IPO by merging with special purpose acquisition company Qell Acquisition Corp at a valuation of $3.3 billion. Prior to this, Lilium announced the completion of a new round of funding exceeding $240 million, led by Tencent.
In 2024, Lilium will also expand its business scope to the Asia Pacific region. In June 2024, Lilium signed a cooperation agreement with Bao'an District, Shenzhen, announcing the establishment of its Asia Pacific headquarters in Bao'an District. The former plans to establish Lilium Asia regional headquarters in Bao'an District to provide comprehensive Lilium aircraft sales, after-sales service, and technical support for the Greater Bay Area, and gradually expand to China and the Asia Pacific region in the future.
However, in recent times, Lilium has been facing quite severe cash flow issues. According to German media reports, Lilium has been negotiating with the German government over the possibility of obtaining state support for the past year.
Lilium's founder and investors have signed an initiative called 'Providing loans to Lilium to strengthen Germany's position as a hub for deep technology'. The German Entrepreneurship Association explicitly stated in a press release that if Germany wants to compete globally, it needs to support startups engaged in deep innovation technologies. The eVTOL field is capital and technology intensive, but Germany's future as an innovation hub will be determined here
Lilium CEO Klaus Roewe also spoke out that the company hopes to obtain a fixed rate loan as a signal to investors that Germany supports entering the electric aviation sector. He said, "This is not to save a company that is in crisis and has lost subsidies. The loan is fully repaid, and the conditions are very favorable for KfW (a German state-owned investment bank), so the same is true for Germany. This is highly likely to mobilize more private investor funds from both domestic and foreign sources
Lilium co-founder Daniel Wiegand stated in a media interview that without financing support, the company will not be able to sustain itself in Germany in its current form, and this future technology will either flow overseas or go bankrupt.
In the latest announcement, Lilium explicitly stated that the company had attempted to obtain a loan of 50 million euros (approximately 54 million US dollars) from the German federal government, but was refused.
EVTOL is a typical technology and capital intensive industry with high entry barriers. The common understanding in the industry is that an eVTOL enterprise requires at least 1 billion yuan in funding from establishment to certification. Whether Lilium can welcome the "White Knight" until crossing the life and death line remains to be observed.