By Anshuman Tripathy
(Reuters) – Air taxi maker Archer Aviation said on Thursday it has raised $430 million in new capital, some of which will be used to develop a hybrid aircraft with defense technology company Anduril Industries.
Shares of Archer fell 4% in early trading.
Existing investors United Airlines and Stellantis, as well as new backers such as Wellington Management and Abu Dhabi investment holding company 2PointZero, participated in the fundraising, which was carried out through a share offering.
Anduril, founded by entrepreneur Palmer Luckey, and Archer said the plane would target a potential “program of record” – a government-approved and authorized acquisition program – of the Pentagon.
The companies did not reveal details about the vertical take-off and landing aircraft, including the target date of entry into service or the investment involved.
“With Anduril at our side and this new influx of capital, we will accelerate the development and deployment of advanced aerospace technologies at scale,” said Adam Goldstein, CEO of Archer Aviation.
Industry executives have said US President Donald Trump’s planned efficiency drive, involving Tesla CEO Elon Musk, could lead to more joint projects between major defense contractors and smaller tech companies in areas such as artificial intelligence, drones and unmanned submarines.
The latest fundraising also comes as the electric vertical take-off and landing (eVTOL) sector faces a cash crunch as technological and regulatory hurdles weigh on the sector, although analysts have said Archer is among the best positioned to survive long enough operate to at least obtain certification. .
Archer, which is also developing a five-seat commercial eVTOL aircraft, said the new fundraising would eliminate any short-term financing needs.
The San Jose, California-based air taxi maker ended the third quarter with $502 million in cash and cash equivalents. The latest funding brings Archer’s total capital raised to date to almost $2 billion.
(Reporting by Anshuman Tripathy and Abhijith Ganapavaram in Bengaluru; Editing by Shilpi Majumdar)
