LinkedIn co-founder Reid Hoffman and tech entrepreneur Mark Pincus are nearing a deal to merge their blank cheque company with Joby Aviation, valuing the flying taxi developer at about $5.7bn, said people briefed on the matter.
Reinvent Technology Partners, their special purpose acquisition company, which raised $690m in a public listing in 2020, is finalising financing for the deal and an agreement could be announced later this month.
If successful, the merger will provide Joby — whose existing backers include Japanese carmaker Toyota and British investment manager Baillie Gifford — with a listing on the New York Stock Exchange.
Joby is the latest electrically powered transportation company that plans to go public via a Spac at an early stage in its development and despite having no sizeable revenue. Joby has built a prototype that has flown more than 600 flights, according to the company, which says it is targeting Federal Aviation Administration certification in 2023 and hopes to start commercial operations a year later.
The Santa Cruz-based company, founded in 2009, has more than 500 employees. In December it acquired Uber Elevate, the flying taxi arm of the ride-sharing group. Uber has also invested $125m in Joby. Eric Allison, the former head of Uber Elevate, is now Joby’s head of product.
The exact timing of the Spac merger deal depends on how quickly Hoffman and Pincus manage to raise additional funding from institutional and private investors, said one person with knowledge of the matter. The person added that if Reinvent failed to secure additional financing the transaction could fall apart.
The duo are counting on the fact that electric car and aviation start-ups have been enthusiastically welcomed by public markets, despite the early stage of some of their businesses and uncertain revenue prospects.
Joby — which has raised $803m to date, according to PitchBook — had been expected by many in the industry to be the first electric flying taxi developer to go public this year. Germany’s Lilium was considered another top candidate.
Instead, Archer, a lesser-known rival, surprised many when it announced earlier this week a $3.8bn public listing and a $1bn order from United Airlines, conditional on obtaining regulatory approval for its so-called electric vertical take-off and landing (eVTOL) aircraft.
Joby and Reinvent declined to comment.
Hoffman, who sold LinkedIn, the professional networking site, to Microsoft for $26bn in 2016, and Pincus, who co-founded the video game maker Zynga, have launched two Spacs. After Reinvent Technology Partners, they launched a smaller vehicle called Reinvent Technology Partners Z, which is seeking other tech-based assets.
A study last month by Deloitte, a consultancy, and the Aerospace Industries Association, predicted the US “air mobility market” would begin deployment in 2025, reap $115bn in revenue by 2035, and create 280,000 jobs along the way.
“With the market poised to grow sevenfold between 2025 and 2035, it’s important for US policymakers and industries to co-operate now to ensure American leadership in this transformative emerging sector,” said Deloitte’s Robin Lineberger.
But some experts worry the nascent industry will take longer to get off the ground and point out that as recently as 2015-18, multiple autonomous car companies were predicting there would be tens of thousands of robotaxis on the road by 2020.
The entrepreneurs behind Joby, Archer and Lilium, are all targeting deployment of their flying taxis between 2023 and 2025.
Brett Adcock, co-founder of Archer, told the Financial Times this week the first passengers taking a flying Archer vehicle to work should take place in just three years. “We’ll launch in a few select cities and a few routes in 2024, and we’ll be scaling up operations from there.”