A German flying taxi company, Lilium, has been rescued from collapse after a group of investors stepped in. This move has reignited discussions about whether Germany provides enough support for its startups.
Lilium, which had filed for bankruptcy in October, was on the brink of shutting down completely this week. However, the company, known for developing small electric-powered jets that take off and land vertically, called this development a “major breakthrough.”
A consortium of European and North American investors, under the name Mobile Uplift Corporation, signed a deal to acquire Lilium’s assets. Although the purchase price and investor details remain undisclosed, Lilium CEO Klaus Roewe confirmed the agreement will be finalized in early January, allowing the company to restart operations.
Founded in 2015 and headquartered in Munich, Lilium had drawn significant attention with over 100 confirmed orders for its flying taxis and hundreds more in pre-orders. Saudi Arabia’s Saudia Airlines was among its notable buyers, signing a deal to purchase 50 jets with an option for 50 more.
The jets are designed to carry 4-6 passengers, travel up to 175 kilometers (110 miles), and reach speeds of 250 kilometers per hour (155 mph). Although the company has yet to conduct a manned test flight, it plans to begin trials next year, with deliveries expected by 2026.
Despite raising $1.5 billion from investors, primarily from the US and China, Lilium faced high development costs. In October, the German parliament rejected a loan guarantee of €50 million, forcing the company to declare bankruptcy and seek new funding.
Before this deal, Lilium had let go of most of its 1,000 employees. However, with the rescue agreement in place, many of these workers are expected to return.
Lilium isn’t the only German flying taxi firm facing hurdles. Another startup, Volocopter, had to cancel test flights at the Paris Olympics due to certification delays for its aircraft engine.
The challenges faced by Lilium and similar companies have sparked debates about Germany’s startup ecosystem. Critics argue that Germany lags behind countries like the US in funding innovative companies.
Lilium’s CEO Klaus Roewe noted that competitors in other countries receive stronger support. Meanwhile, Germany’s Startup Association warned that failing to back innovative firms like Lilium could harm the country’s reputation in the tech sector.
However, some believe public funding for such ventures is risky. A commentary by Sueddeutsche Zeitung criticized Lilium, stating its struggles stem from its inability to produce significant results despite years of investment.
This case has highlighted the need for stronger support for startups in Europe’s largest economy, as well as the challenges these young companies face in securing adequate funding and navigating high development costs.
