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Wednesday, Jun 19, 2024

$145M in Funds For Overair Flying Taxis

Flying taxi startup Overair in Santa Ana aims to get its all-electric test prototype into the air next year, boosted by an infusion of $145 million in financing from its South Korean backers.

Overair is one of several companies, including another with a large Orange County presence, seeking to launch flying taxis as the next revolution in urban travel. The company, founded two years ago, is developing an all-electric eVTOL (electric vertical take-off and landing) aircraft, called Butterfly, which will land and take off vertically while holding up to five passengers and a pilot.

The fresh funds will be used for further development of the Butterfly and for “laying the groundwork for our commercialization,” Josh Aronoff, Overair’s head of business development, told the Business Journal on June 15, the day after the financing announcement.

In fact, Aronoff said the company is aiming to start commercial passenger service in 2026, likely on its own in some markets and in partnership with other operators in other markets.

“Our strategy is fundamentally to produce as many vehicles as possible, as quickly as possible,” Aronoff said.

Overair plans to sell its airborne vehicles to other companies and run its own flying taxi service.

Hiring Push

Overair currently has 120 employees and aims to hire another 100 over the next 12 months.

Aronoff said the plan is to hire up to 1,000 people over the next several years, covering engineering, manufacturing and corporate jobs.

The company was advertising for two dozen positions on its website as of June 14, including chief financial officer, mechanical design engineer and senior flight controls engineers.

“We are involved in a vehicle development program that we anticipate taking a lot of resources and creating a lot of jobs and making a lot of vehicles,” co-founder and CEO Ben Tigner told the Business Journal in November.

$170M Raised

The company said on June 14 it had received the latest financing from Hanwha Systems, which provided $25 million in the company’s only other reported funding round in 2019, and Hanwha Aerospace. Both are part of the Hanwha Group conglomerate of South Korea (see story, page 36).

Aronoff says Hanwha’s 30% ownership stake in the company remains unchanged after the latest investment, while an interim valuation of Overair has not been disclosed.

Other competitors in the emerging eVTOL space include Uber partner Joby Aviation (NYSE: JOBY) of Santa Cruz, which was valued around $3 billion as of last week.

With the investment announced last week, Overair remains on track to fly its all-electric experimental prototype in the second half of 2023, the company said.

Karem Spinoff

Overair was spun out of Lake Forest’s Karem Aircraft, which was founded by legendary drone pioneer Abe Karem.

The advanced propulsion system being used for Butterfly is derived from decades of military work that Karem, an Overair co-founder, developed, the company said.

In addition, Hanwha will provide electric motors and battery packs for Overair’s prototypes.
The spinoff has come a long way since its founding in 2020.

“We’re focused on having the aircraft certified with the FAA by the end of 2025 and begin commercial service operations with vehicles in 2026,” Tigner said in an interview late last year.

The Butterfly vehicles are being designed to have a range of over 100 miles, the ability to recharge quickly between trips, and a top speed of around 200 miles per hour.

“We’ve proven Butterfly’s propulsion system, so we’ll now begin validating Butterfly’s ability to operate safely in real-world weather conditions, carry significant payloads, and fly incredibly quietly,” Tigner said in a statement on June 14.

The slow turning propellors used by Overair produce extraordinarily little sound, which will allow Butterfly to operate in high-density areas with noise sensitive communities, the company said.

As the company continues to work toward FAA certification, Overair is also working with NASA and Urban Movement Labs in Los Angeles to develop urban air mobility routing and infrastructure.

While Overair has been testing its electric motor systems in the Southern California desert, it operates out of 203,000 square feet of space in two buildings at 3001 S. Susan St. and 3030 S. Susan St., near Segerstrom High School.

Supernal Neighbor

Along with Overair and Joby Aviation, other companies charging into the flying taxi sphere include Supernal, a new division of South Korea’s Hyundai Motor Group. Supernal’s headquarters are in Washington, D.C., but its engineering base and largest source of jobs was established in Irvine last year.

Other competitors include European plane maker Airbus and Germany’s Volocopter.
The skies won’t be too crowded with eVTOL competition, Tigner told the Business Journal earlier this year.

“There’s a group of companies that are all in a competition with each other of sorts, although I will say at least in the short term it’s far more collaborative than competitive,” Tigner said of the industry.

He adds: “The potential market is much, much larger than any one company can fill.”
The development of the eVTOL industry has faced numerous challenges, chief among them the safety of the people on the ground and those in the air.

“We are working very closely with the FAA to see how these kinds of aircraft are going to be certified,” Tigner said. “We don’t fit cleanly into the mold of a regular airplane or a regular helicopter or any other known category.”

Korean Heavyweights Back Overair

Hanwha Aerospace and Hanwha Systems are the two South Korean firms backing flying taxi company Overair of Santa Ana.

Overair calls them “global leaders in ultra-precision communications and aircraft technologies.”

Hanwha Aerospace is the only large aircraft engine manufacturer in South Korea. It’s also involved in outer-space, including its 2021 buy of Satrec Initiative, a domestic satellite specialist.

Hanwha Systems provides “differentiated smart technologies” in defense electronics and other high-tech fields.

The South Korean firms say they are looking to invest in disruptive businesses that can “really excel in the future,” and believe Overair’s eVTOL vehicle is one of those game changers.

“With regard to our investment decision in Overair, we assessed that the company had the numerous patents and core technologies required to develop [a] highly efficient, low noise vehicle,” Sungchul Eoh, CEO of Hanwha Systems, said in a statement.

“We see the potential of Overair’s Optimum Speed Propulsion system and we will continue to work together to find synergies and bring this breakthrough technology to the world,” he said.

—Kevin Costelloe

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