The futures of at least two eVTOL aircraft developers hang in the balance as Lilium and Volocopter scramble to firm up urgently needed new capital to prevent bankruptcy. Over the Christmas and New Year holiday period, the financial foundations at both German companies—founded respectively in 2015 and 2011—shifted precariously against a backdrop of ever-starker contrasts between the sector’s “haves” and “have-nots.”

Volocopter filed for insolvency with the court in Karlsruhe on December 26 and a day later attorney Tobias Wahl was appointed administrator, tasked with finding “a viable solution to maintain regular operations outside of insolvency proceedings.” Under German insolvency laws, the company and its employees can continue to conduct work on its two-seat VoloCity eVTOL vehicle while efforts to find new backers or owners proceed.

The situation at Lilium had seemed even more precarious until December 24 when the company announced an agreement for a consortium of investors from Europe and North America to acquire the assets of the group’s German subsidiaries, Lilium GmbH and Lilium eAircraft. According to KPMG, which has been handling Lilium’s insolvency proceedings since October 28, the provisional deal with Mobile Uplift Corporation (MUC) is expected to close in January.

To complete the process, the buyout has to be approved by the creditor committees for the two Lilium subsidiaries. This can only occur after the court in Weilheim has opened insolvency proceedings specifically over Lilium’s assets.

On December 30, MUC notarized an investment agreement covering a capital injection of €200 million ($208 million) to support ongoing operations at Lilium. In a media statement, MUC said several undisclosed “renowned international investors” are backing the transaction, along with a number of Lilium’s existing shareholders and creditors. These include battery developer CustomCells, which itself is backed by Abacon Capital, Porsche Venture, 468 Capital, Vsquared Ventures, and World Fund. MUC’s underwriting for the takeover is being coordinated by venture capital groups Earlybird and GenCap.

According to MUC, it has begun negotiations with customers committed to buying the six-passenger Lilium Jet. It is also holding talks with “respected partners from the Gulf states.”

Saving German Aviation Technology Leadership

“Saving Lilium is of central importance to strengthen Bavaria and Germany as an aviation location as well as future technologies and to create high-quality jobs,” said MUC in its statement. “The partners involved are aware of the size of the task and the high risks and challenges associated with it, but the loss of a company like Lilium would be fatal for Germany and Europe.”

To meet the requirements of German insolvency law, on December 20 Lilium laid off its remaining 1,000 employees, having earlier cut around 200 positions. Neither MUC nor Lilium has indicated when or how work to develop the aircraft could resume, or how many jobs might be restored.

In the UK, Vertical Aerospace announced on December 23 that its shareholders had endorsed a $50 million cash injection led by its leading creditor and investor Mudrick Capital. The company’s leadership team said the agreement, which also covers $130 million of debts being converted into equity, should provide sufficient funding to allow work on its four-passenger VX4 aircraft to continue almost until the end of 2025.

Vertical’s situation had appeared uncertain until a provisional agreement with Mudrick Capital had been reached on November 25. Prior to that, the company’s founder and former chairman, Stephen Fitzpatrick, had not provided the second $25 million payment as part of a $50 million capital injection agreed upon earlier in 2024.

Mudrick could have opted to enforce certain debt default terms but on December 15 confirmed that it would not do so pending a deal that is expected to be completed during the first quarter of 2025. As of December 20, Vertical said it held cash reserves of £25 million ($32 million).

Meanwhile, Canadian start-up Horizon Aircraft closed 2024 with a December 23 announcement of a further $8.4 million investment in its Cavorite X7 hybrid-electric VTOL aircraft. The new funding has come from an undisclosed existing investor in the company.