Hedge Fund Manager Takes Control of Flying Taxi Company Vertical Aerospace

Hedge fund manager Jason Mudrick, known for his successful investments in distressed companies, has turned his attention to a more futuristic venture: flying taxis. Mudrick's fund has taken control of Vertical Aerospace, a UK-based company developing electric vertical takeoff and landing (eVTOL) aircraft, through a 1.3 billion dollars debt-to-equity swap. This move ousted the company's founder, Stephen Fitzpatrick, and positions Mudrick to lead Vertical Aerospace towards its goal of launching its flagship model, the VX4, by 2028.

The VX4 is designed to carry six passengers and offer short, quiet, and efficient flights at a price comparable to premium ride-sharing services. For instance, it aims to transport passengers from Manhattan to the Hamptons in just 40 minutes. While this may sound like a scene from a science fiction movie, Mudrick emphasizes that the aircraft is already in the testing phase, with successful flights completed.

Vertical Aerospace faces stiff competition in the eVTOL sector. US rivals such as Archer Aviation, Beta Technologies, and Joby Aviation have collectively raised over 1.4 billion dollars in the past year, while Vertical Aerospace secured only 90 million dollars in January. The more stringent certification standards in Europe may delay Vertical's commercial launch until 2026, but all competitors are targeting this timeframe.

Despite the challenges, Vertical Aerospace is betting on a straightforward business model: selling the aircraft and generating continuous revenue through maintenance services and battery replacement contracts. This approach differs from competitors like Joby Aviation, which plans to operate its own fleet of flying taxis.

Mudrick's interest in Vertical Aerospace began in 2021 when he was introduced to the company by its chairman. Initially skeptical, he was convinced by the fundamental logic that cities cannot expand indefinitely outward or downward, and the only direction left is upward. Vertical Aerospace was founded in 2016 after Fitzpatrick experienced traffic gridlock during a Formula 1 event in São Paulo, inspiring him to create a solution for urban air mobility.

Currently, Vertical Aerospace is tasked with raising 1 billion dollars to cover certification costs. The company's CEO, Stuart Simpson, assures that existing funds can support short-term operations, but new capital will be needed soon. Despite concerns about public acceptance and air traffic management issues, Mudrick remains optimistic about the future of eVTOL technology and Vertical Aerospace's role in it.