Looking to the skies: Funding for future air mobility takes off

Amid emerging technologies and increasing concerns about sustainability, innovative options for air mobility are gaining traction—and funding.

Aviation is heading toward a major transformation whose impact will be felt throughout the mobility sector. As mobility-as-a-service gains acceptance and new technologies become available, the transportation industry is increasingly looking to the sky for innovative, sustainable ways of moving people and goods from one place to another.

Funding for these future air mobility (FAM) solutions has skyrocketed—with an 83 percent annual increase in just the past five years to a total of more than $10.3 billion (Exhibit). In the first five months of 2021 alone, the industry attracted more than $4.6 billion in funding from venture capital funds and through announced intended mergers with special purpose acquisition companies (SPACs). 1

Funding for Future Air Mobility has accelerated significantly in recent years.
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

Most of this funding of the past years has centered on manned advanced air aobility (AAM) solutions, with electric vertical takeoff and landing (eVTOL) air taxis and other passenger options accounting for nearly 80 percent of the total funding. The remaining $2.4 billion was allocated to drones, sustainable aviation, super- and hypersonic players and others in the future air mobility ecosystem such as unmanned traffic management (UTM) and infrastructure providers. Those areas might be poised for significant influx in the coming months as interest for the sector continues.

As companies advance to later funding rounds and go public via SPAC mergers, the average deal size has shown dramatic growth—from approximately $20 million in 2019 to more than $300 million in 2021. The overall number of deals, however, has dipped during the pandemic.

Related Articles