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Aviation start-up ZeroAvia has secured the backing of the UK’s state-owned infrastructure investment bank in its latest fundraising round to help it develop a hydrogen-electric engine for zero-emission flight.
ZeroAvia said it had raised $116mn from several investors, including $40mn from the UK Infrastructure Bank. The equity investment makes the bank, which was set up two years ago to draw private financing into climate projects, one of ZeroAvia’s top five investors alongside Bill Gates’s energy innovation fund, Breakthrough Energy Ventures.
Airbus, Barclays Sustainable Impact Capital Capital and Saudi Arabia’s Neom Investment Fund also took part in the latest fundraising.
The money will help the Anglo-US start-up, which was founded by chief executive Val Miftakhov in 2017, to develop its engines and secure their certification by UK regulators by the end of 2025. Two-thirds of ZeroAvia’s 150 staff are in the UK, although the business is based in California.
The company initially plans to install its hydrogen-fuel cell engines on existing airframes to simplify getting regulatory approval and reduce the time to market. It hopes to have a nine to 19-seat aircraft capable of flying up to 300 miles ready for commercial flights by 2025, with a 40 to 80-seat aircraft able to fly up to 700 miles entering service by 2027.
The company is expected to announce shortly the names of airlines that have agreed to fly with the engines. It completed a test flight of a propeller plane partially powered by hydrogen fuel cells in January this year.
With the completion of the fundraising, ZeroAvia has now raised more than $250mn in equity investments and grants since it was launched. The company has previously benefited from UK government support through the Aerospace Technology Institute which allocates state funding for innovation in the sector.
The investment from the UKIB underlines the growing interest among governments in hydrogen as a potential to help aviation reduce its carbon footprint.
Georgy Egorov, chief financial officer of ZeroAvia, said the support from the UKIB was a “big validation” of its technology, adding that the company was “working full throttle” on its plans.
While differences remain about the speed at which the industry can make hydrogen flight a reality, there is a growing consensus that it will have a role to play in powering short to medium-haul aircraft. Many industry executives in the UK, however, believe more urgency is needed to drive co-ordination across sectors to deliver the necessary infrastructure for a net zero economy.
“Aviation and hydrogen are sectors that need significant private investment to get to net zero,” said Ian Brown, head of banking and investments at the UKIB.
“By providing confidence to investors, our equity has helped to crowd in the private investment needed for the continued development of this cutting-edge technology.”
ZeroAvia is among a number of aviation industry start-ups tapping investors for funding with the promise of zero-emissions flying.
Air taxi start-up Vertical Aerospace has repeated a warning to investors that it needs to raise more money by the end of the third quarter of next year.
The Bristol-based group, founded by entrepreneur Stephen Fitzpatrick and is developing an electric vertical take-off and landing (eVTOL) vehicle, told shareholders in a third-quarter update that it remained “focused on raising new funds in 2023, with our current cash runway taking us towards the end of Q3 2024”.
Vertical said it had cash and cash equivalents totalling £74mn at the end of the quarter. Shares in the company, which listed on the New York Stock Exchange through a special purpose vehicle in December 2021, have fallen more than 97 per cent, valuing it at $167mn.
Vertical declined to comment.
