Air taxi developer Archer raises investment from BlackRock-managed funds

Air taxi developer Archer Aviation has raised $300 million from major institutional investors, including funds managed by BlackRock, the world’s largest asset manager. Archer plans to use the proceeds to accelerate development of its hybrid aircraft platform for the defense market, a new area for the company, which has proven to be more promising than initially expected.

Archer has announced a raise of $300 million from leading institutional investors, including BlackRock-managed funds, through the sale of 35.5 million shares at $8.50 apiece. The proceeds are to be used to accelerate the development of hybrid aircraft for the defense sector.

“I believe the opportunity for advanced vertical lift aircraft across defense appears to be substantially larger than I originally expected. As a result, we are raising additional capital to help us invest in critical capabilities like composites and batteries,” Archer founder and CEO Adam Goldstein was quoted as saying in the press release.

JPMorgan sees the electric vertical takeoff and landing (eVTOL) passenger aircraft market reaching $1.0 trillion by 2040 — or as much as $3 trillion when factoring in cargo and military operations. For context, Kings Research estimated the global air taxi market at $3.68 billion back in 2023.

Archer Defense is the company’s division for military VTOL aircraft. Its launch was announced in mid-December as part of a strategic partnership with Anduril Industries, which specializes in defense technologies. At the time, Archer also revealed that it had raised $430 million from long-term partners, including automaker Stellantis and air carrier United Airlines, as well as new investors such as Wellington Management and 2PointZero, a subsidiary of Abu Dhabi’s investment holding IHC.

The latest $300 million investment has brought Archer’s total liquidity position to about $1 billion, according to the press release. The company stated that strengthening its balance sheet would better ready it for commercialization. Archer’s flagship Midnight eVTOL air taxi will be able to transport passengers from Newark Airport in New Jersey to downtown Manhattan in just a few minutes for $100 per person, Goldstein says.

“That’s trips that take 60-90 minutes on the ground that we can replace with a five-to-ten-minute flight in the air,” he noted.

Archer already has over $6 billion in indicative Midnight orders. In December, the company signed a multiparty agreement with government and commercial entities in Abu Dhabi to make it the first commercial air taxi operator in the emirate. It plans to launch the first flights by the year-end.

Advanced air mobility, as mentioned above, is coming to the U.S. as well. In October, the U.S. Federal Aviation Administration approved eVTOL aircraft for operation in national airspace alongside conventional airplanes and helicopters. The regulator is expected to approve Archer’s aircraft for commercial flights this year, enabling it to start selling them to clients, as reported by Barron’s. Still, air taxi services in the U.S. are not expected to launch before 2028.

Yesterday, Tuesday, February 11, Archer fell almost 9% to $9.29 per share before clawing back some of the losses in after-hours trading, when it gained 1.6% to $9.40 per share. Over the last 12 months, the stock is still up 72%.

Most of that growth came after the November election of Donald Trump as U.S. president. Since then, Archer has nearly tripled.

The rally prompted JPMorgan to downgrade its rating for Archer from “buy” to “hold” and raise its target price by 50% to $9.00 per share on January 10. The investment bank also revised its rating for Archer’s main peer, Joby Aviation, downgrading it from “hold” to “sell” with a new target price of $6.00 per share, 20% above the previous one. JPMorgan analyst Bill Peterson, as mentioned by Barron’s, points out that both stocks were rising too much and too fast and were trading as if type certification had already been completed. Both firms are likely seen as “speculative tech beneficiaries” of Trump’s new term in the White House, with investors expecting the new administration to support the commercial space and eVTOL sectors.