Aspiring Seattle-area airframe maker Zunum Aero has encountered trouble closing its latest fundraising round. The delays could set back the startup’s timeline in its bid to develop an electric hybrid passenger airplane—and revolutionize short-haul air travel. The company already has pushed back its target for entry into service of its ZA10, a short-haul hybrid designed for a capacity of nine to 12 passengers.
The startup had hoped to close its latest fundraising round in August, then October. “That fell through, which put us in a lurch,” CTO Matt Knapp said in early December. The company could soon have to start scaling back its development work to buy time to find enough investors, he added. Toward the end of last month, Knapp said the company was “making progress,” but had nothing to announce.
Zunum Aero already has attracted big names to back it, including Boeing’s venture-capital unit HorizonX and JetBlue Airways’ Technology Ventures. Zunum also received an $800,000 research grant from the state of Washington’s Clean Energy Fund. The company is working to build a core group of new investors to close the latest fundraising round in the next couple months, Knapp said.
Aerospace has become a hotbed of venture capital activity, as investors poured about $2.3 billion into the industry in 2018, according to data from Crunchbase. However, Zunum must compete with drones and space rockets—perhaps sexier investment targets than low-cost, low-carbon short-haul passenger service.
Zunum’s business case rests on three important breakthroughs, according to material prepared for potential investors: much lower operating costs, unleashing a new regional travel market, and nearly eliminating carbon emissions. The ZA10 would tap into thousands of currently little-used regional airports spread across the country. That means passengers can skip traffic, security, and other hassles associated with major airports. The company pitches it as an attractive solution for business travel in congested corridors, such as California and the Pacific Southwest, the Northeast, and the Pacific Northwest.
Energy density in batteries does need to improve for the ZA10 to make good on its promised economics. But the company only needs batteries to improve along the existing trend, which falls in line with most major forecasts for battery technology. Zunum claims the ZA10 will cut operating costs by 60 percent to 80 percent of comparable traditional commuter airplanes. In investor material, it compares the ZA10 to the Pilatus PC-12NG and the Cessna CJ4.
A larger electric hybrid, the ZA50, which Zunum hopes to develop by 2030, will carry 48 passengers and offer slightly better operating costs than a Bombardier Q400, according to the investor material. The company plans to begin flight testing systems in 2019. In October, it announced a deal with Safran to provide a modified helicopter engine dubbed the Ardiden 3Z. The ZA10 will use a gas turbine to supplement the battery fuel cells during critical flight stages, such as takeoff, or to extend the range.
Zunum announced a contract covering 100 airplanes from JetSuite for scheduled and chartered flights. It has not said whether or not the deal involves a firm order or whether JetSuite has placed a deposit.