Hedge Fund Manager Takes Control of Flying Taxi Startup Vertical Aerospace

Hedge fund manager Jason Mudrick, known for his successful investments in distressed companies and meme stocks, has now set his sights on a more futuristic venture: flying taxis. Mudrick's fund has taken control of Vertical Aerospace, a UK-based startup developing electric vertical takeoff and landing (eVTOL) aircraft. The fund converted $1.3 billion in debt into equity, ousting the company's founder, Stephen Fitzpatrick, and taking the helm of the project. The goal is to launch the flagship model, VX4, by 2028.

The VX4 is designed to carry six passengers and is intended to 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 futuristic movie, Mudrick emphasizes that the aircraft is already in the testing phase.

Vertical Aerospace faces stiff competition in the eVTOL sector. Rivals such as Archer Aviation, Beta Technologies, and Joby Aviation have collectively raised over $1.4 billion in the past year, while Vertical secured only $90 million in January. Despite the competitive landscape, Vertical is banking 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, which plans to operate its own fleet of flying taxis.

Mudrick's interest in Vertical 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, leaving the sky as the only viable direction for growth. Vertical 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 mobility.

Currently, Vertical is tasked with raising $1 billion to cover certification costs. The company's CEO, Stuart Simpson, assures that existing funds will support short-term operations, but new investments are urgently needed. Despite concerns about public acceptance and regulatory hurdles, Mudrick remains optimistic about the future of eVTOL technology. The investment by Mudrick Capital Management not only provides the necessary financial backing but also brings a wealth of experience in navigating the complexities of the aviation industry.