Lilium, the ‘air taxi’ startup once valued at $3.3 billion, now on the brink of insolvency

Lilium, a German flying taxi startup, has been on our radar since it first captured our attention in 2019 with its vision of transforming urban travel through unmanned air taxis. Fast forward nearly a decade, and the company now faces a stark reality—potential insolvency.

According to a report from CNBC, Lilium could go under if it doesn’t secure emergency funding from the Bavarian state government. This marks a steep decline for a startup once seen as Europe’s answer to creating a futuristic transportation solution.

“German aerospace startup Lilium faces insolvency if it doesn’t raise emergency funding from the state government for the southeastern state of Bavaria,” CNBC reported.

This latest development comes almost a year after Lilium received European approval for its electric jets, gaining the go-ahead from the European Union Aviation Safety Agency to design and operate electric vertical take-off and landing (eVTOL) vehicles on a global scale. These electric jets were part of a broader movement to create “flying cars,” with startups across the U.S., Europe, and Asia all racing to bring them to market.

But despite the initial promise, Lilium is now in a tight spot. The company has been trying to secure taxpayer funds from the German government to stay afloat, but so far, things haven’t gone as planned.

What Went Wrong?

Lilium has been in talks with both the German federal government and the Bavarian state government for an emergency cash injection. They initially requested €50 million ($54 million) from the federal government, but that request was turned down by lawmakers.

In a recent regulatory filing, Lilium revealed that the budget committee of Germany’s federal parliament decided not to approve a €50 million guarantee for a planned €100 million loan. The company has since turned its focus to negotiating with Bavaria for at least €50 million in state support.

A spokesperson for Lilium declined to comment beyond what was included in the official filing.

The decision to deny the federal aid sparked criticism from Bavaria’s economy minister, Hubert Aiwanger, who called it “regrettable.” Meanwhile, Danijel Višević, co-founder of climate-focused investor World Fund, said it was short-sighted for lawmakers to view air taxis as merely a luxury item for the wealthy, especially considering the government had supported other groundbreaking tech, like Tesla, during its early years.

Lilium’s jets don’t come cheap, with some models priced as high as $9 million. They also had a six-seater version in the works, which would have cost around $7 million. Despite these high price tags, Lilium managed to ink deals with major names like Lufthansa in Germany, Saudia in Saudi Arabia, and Groupe ADP, the Paris-based airport operator.

The Rise and Fall of Lilium

Lilium was founded in 2015 by four university students—Daniel Wiegand, Sebastian Born, Matthias Meiner, and Patrick Nathen. The startup quickly became a standout in Europe’s air taxi sector, pulling in over $100 million from investors like Tencent, Atomico, and Obvious Ventures. The company grew to employ about 350 people in Munich and had plans to add 500 more jobs by 2025.

In September 2021, Lilium went public on the Nasdaq through a merger with SPAC Qell, at one point reaching a valuation of $3.3 billion. But the good times didn’t last long—its stock has since plummeted by more than 95%, with shares trading at less than 50 cents.

Lilium’s journey, from a promising startup with lofty goals to a company scrambling for survival, underscores the harsh realities of building revolutionary technologies.

Lilium Founders