ANALYSING ADVANCED AIR MOBILITY (AAM) INVESTMENT STRATEGIES I
This is Part Three in a series of posts with excerpts from our whitepaper 'Mapping the Advanced Air Mobility (AAM) ecosystem', published in collaboration with the Lufthansa Innovation Hub in April 2021.
You can find Part One here - 'An Introduction to the Advanced Air Mobility (AAM) Ecosystem', and Part Two here - 'Mapping the Advanced Air Mobility (AAM) ecosystem'.
AAM investment strategy: the Air Taxi Pureplay
The visual map enables us to spot patterns of relationships between the different ecosystem players. Our analysis provides evidence of two major strategic approaches by most active stakeholders. (1) Air taxi pureplay, and (2) the AAM sector spread strategy.
Baillie Gifford‘s entry into the air taxi market is noteworthy, not least because they were early backers of both Tesla and SpaceX. They have taken positions in air taxi pureplay Lilium ($35m USD) and Joby Aviation (reportedly a smaller stake) and are major shareholders in Embraer, who recently spun their own Urban Air Mobility (UAM) division out into a standalone entity, Eve Air Mobility.
Hence, Baillie Gifford seem to be targeting solely air taxi manufacturers. The air taxi pure-play strategy approach places emphasis on the longer-term but higher-risk passenger-carrying segment alone, hedging against regulatory risk by investing across multiple regions with interests in Europe (Lilium), Latin America (Embraer), and North America (Joby), and technology risk through backing different vehicle architectures.
In Part Four of the whitepaper we look at an alternative strategy for investing in the Advanced Air Mobility (AAM) sector, 'The AAM Sector Spread':