Reinvent Technology Partners (NYSE: RTP) announced its intentions to take Joby Aviation public via a reverse merger. This announcement made waves on Wallstreet this week as Joby Aviation plans to launch its Air Taxi service in 2024. The aviation company will list on the NYSE however the new stock ticker is yet to be released. The funds raised from the transaction will allow Joby Aviation to start commercial operations, including the needed certification of their aircraft and development of manufacturing facilities. In similar fashion, ACIC announced its merger last week with Arrival who are also launching a eVTOL platform for travel in 2024. Both Joby Aviation and Arrival plan to tap into the $1 Trillion eVTOL industry. This article will breakdown everything you need to know about the Joby Aviation and Reinvent Technology (NYSE:RTP) merger.
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Key details on Reinvent Technology and Joby Aviation merger
- The merger values the combined company at $6.6 billion and is expected to provide approximately $1.6 billion in funding. The much needed proceeds will be used towards the commercialisation of their eVTOL aircraft. This includes the commencement of its passenger service, including certification of aircraft and development of manufacturing facilities
- The merger is expected to close in the second quarter of 2021, assuming all requirements are met and shareholders approve of the proposed merger.
- Joby Aviation plans to launch its commercial operations in the United States in 2024. In addition, the company will also look to scale its service globally.
- The announcement of the merger saw a short spike in the stock price however RTP stock is now trading under its valuation prior to the confirmation of the merger.
“For the last decade, we have been laser-focused on one task – developing the best possible technology for this market...But our long-term vision has always been to build a global passenger service, helping a billion people to save an hour every day, while contributing to the protection of our precious planet.. Today’s transaction lets us look ahead to the next decade and provides us with the resources we need to bring our vision to life...“Since our very first meeting it was clear that Reinvent shared our fundamental desire to have a positive, long-term impact on the world and we couldn’t be more excited to welcome them onboard.”JoeBen Bevirt, Founder and CEO of Joby Aviation
Why the hype for Joby Aviation?
Firstly, Joby Aviation have been developing a piloted eVTOL over the past decade, with over 1,000 test flights conducted to date. The company is the first to be granted airworthiness approval for an eVTOL aircraft by U.S. Air Force. Furthermore, Joby Aviations aircraft have been designed in a cost effective manner allowing for an affordable Air Taxi service/platform. The company also has close ties with Toyota in a strategic partnership to assist in manufacturing development alongside its relationship with Uber after acquiring its Uber Elevate division (aerial ride sharing). Later this year the company expects to begin construction on its 450,000 square foot manufacturing facility.
What to expect from Joby Aviation in 5-10 years?
Looking forward, the company expects revenues to reach $131 million in 2024. Furthermore, this is expected to grow to $721 million in 2025 and reach $2 billion by 2026. By 2026, Joby Aviation expects to have 963 aircraft manufactured. These aircraft are expected to have a 15 year life span in operation according to the company. The cost per aircraft is expected to be upwards of $1.3 million.
Looking into the next 10 years of operations, the company expects to have 14,000 aircraft operating with a revenue of $20 billion. It expects to be operating in 20 different cities and be the leading operator of aerial ride sharing vehicles. Although these are impressive numbers, investors should review these forecasts with caution as these numbers are only predictions based on all future assumptions being met.
In conclusion, the merger looks to provide investors another entry point into the eVTOL industry. Furthermore, the funds raised will provide essential capital needed to progress the companies vast expansion plans. Joby Aviation also have a very strong outlook on revenue and growth. However, investors must tread with caution as the company won’t generate any revenue until 2024 assuming it meets all requirements to commence its Air Taxi service. All in all, this is an exciting opportunity for both Reinvent Technology and Joby Aviation as they begin a new chapter in the way we travel.
Written by Tyger Fitzpatrick
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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