Lilium To Raise Up To $192 Million Through Upsized Financing Package

Lilium has announced plans to raise up to $192 million in new financing, more than previously anticipated, through a public share offering and private placement that should take the air taxi developer most of the way to first manned flight next year.

That new funding was widely expected, as Lilium had to raise an additional $75 million in order to receive a $75 million match from existing investor Tencent as part of a $250 million capital raise announced May 1. But in addition to the $75 million underwritten public offering, the company also announced a $42 million Private Investment in Public Equity (PIPE) led by Earlybird Venture Capital, an existing shareholder. All told, the upsized financing package means that Lilium now stands to raise up to $292 million in new funding, including the funds previously committed by Tencent. 

As part of the $75 million public share sale, which runs through July 18, around 57.7 million shares of Class A stock will be sold to the public at $1.30 per share, with the option for the underwriter to purchase up to 8.7 million additional shares to cover over-allotments. The funds will be matched by Aceville PTE Limited, a subsidiary of China’s Tencent Holding. 

The $42 million PIPE will be led by Earlybird Venture Capital and also include BIT Capital, UVC Partners, and German businessman Frank Thelen, as well as multiple Lilium board members and senior executives. The private placement will consist of around 32 million shares priced at $1.30 and warrants to purchase up to roughly 8 million shares at an exercise price of $2 per share. Half of the PIPE financing will close on July 18 and the other half on July 22.

Writing in a client note following the announcement, Raymond James analyst Savanthi Syth described the new financing as “encouraging, yet necessary,” although she estimated that Lilium will still require a further $50 million to get its aircraft to first manned flight, expected in the fourth quarter of 2024. She added that there may be potential for government-sponsored grants to assist the company in extending its cash runway. 

The first manned flight milestone would unlock predelivery payments from sales of the limited edition Lilium Jet Pioneer Edition, which the company says should help bridge the gap to type certification and commercialization in 2025.

Sergio Cecutta, CEO of SMG Consulting, told the AAM Report that he thinks the additional funding should provide Lilium with a cash runway through to first conforming prototype, although he said that “all bets are off” as to whether the company will have enough cash to see the type certification process through to completion.

With the latest funding complete, Cecutta estimates Lilium would have about $400 million of pro forma liquidity. Given that the company is on track to burn through between $250-$280 million this year–coupled with expectations that spending will increase next year as type certification approaches–he estimates Lilium will have enough cash to make it to the end of next year, but not much further.

“So they better get their conforming aircraft in the air by the beginning of ’24, or it’s going to be a problem,” Cecutta adds.

The share sale announcement sent Lilium’s stock down more than 20% as of midday July 14, bringing the stock price back into alignment with the $1.30 public sale and PIPE price.