From sci-fi to leader in air mobility - the story of Lilium
How Daniel Wiegand grew Lilium from an idea while watching YouTube videos to one of the leading companies in air mobility.
In 1982, Blade Runner was released in the cinemas worldwide. It portrayed a dystopian future of Los Angeles set in 2019. The movie had bold predictions - smart robots, homes that talk with us, even taller skyscrapers, climate change.
It correctly guessed these predictions (albeit with slight changes compared with what we ended up with), but there was one prediction that didn't make it: flying cars.
Since then, this concept has been portrayed in several sci-fi movies - can there even be sci-fi movies nowadays without flying cars? - but we don't have yet a mainstream solution, to the disappointment of many fans across the globe.
But several companies are currently working on making this dream a reality and developing their own versions of flying cars.
One of the most promising companies to take the lead is Lilium, a German-based company founded in 2015. Since then, they've raised billions of dollars and are going to be listed in Nasdaq. Their goal is to be operational by 2025.
They don't want to just manufacture these aircrafts: they want to become the Uber of skies.
// HOW IT STARTED
Daniel Wiegand was born in 1985 in Tübingen, a town in the south of Germany.
Daniel has his eyes on the sky since he can remember. He always wanted to fly and, as a kid, he was obsessed with birds. He had birds as childhood pets and his parents would take him on holidays to watch seabirds. His toys were radio-controlled aircrafts.
When he was eleven, he built model planes with an electric motor and at fourteen he flew his first glider. He was always an exceptional student, having filed his first patent while still in high school and won multiple awards, including “Jugend forscht”, Germany’s most recognized tech competition, where he won for developed an adaptive aerofoil.
He decided to study economics, but quickly found out he didn't love it, so he changed to aerospace engineering in Munich.
After that, he joined ABB in Switzerland as a project manager, where he worked on hybrid ship propulsion. That made him understand how large corporations work and he realised that he would prefer to work in smaller and more entrepreneurial companies.
So he came back to Munich to finish his Master's, during which he did an exchange semester in Glasgow, Scotland.
And that's where he got the idea for Lilium.
The idea came to Daniel as it would for any aerospace student: watching YouTube videos about aircrafts.
"I was an aeronautical engineering student, sitting in my dorm room in Glasgow watching YouTube videos of the V-22 Osprey, a military tilt-rotor aircraft, when the idea first came to me."
For context, this is a vertical take-off and landing transporter aircraft. That's when he realised that this type of aircrafts could be the perfect means of transportation, since it can fly fast and take-off and land anywhere. But for it to be adopted mainstream, it needed to be electric, emission-free, low noise and smaller.
Just for fun, he started doing calculations to see if it was possible to do this with an electric motor. As he saw that it could actually work, he took it more seriously and, after coming back to Munich, he started working more on it and set out to find co-founders that would cover all the technical parts of the aircraft.
He ended up building the company at the same time as he was finishing his master degree. They started by doing a small scale engine, approximately the size of a shoe box, and luckily suppliers provided them all the parts for free.
They bootstrapped the company for the first 12 months. They got 50.000€ from the European Space Agency and each of the co-founders took on debt to bring an additional 10.000€. But it was still not enough.
They were running out of money as the prototype was almost finished, so they had to start approaching angel investors. They'd split the days with mornings for contacting investors and afternoons and nights to build the prototype in the garage.
Eventually they met Frank Thelen, a German investor. Frank quickly liked the team and what they set out to do, but it was not an easy decision:
"After intense discussions about why and how they wanted to build the first electric VTOL jet, we knew:
Daniel had the perfect founder team for the mission
Lilium would be an entirely new market and long term challenge for us
Even if we wrote our biggest check ever, it would only last for 6–9 months
There was a significant probability we would loose our money"
There was a significant risk in this investment, as this was a new unexplored market and he knew it would need massive amounts of funding to succeed. Above all, it was a long-term investment that would take years to materialise in a commercial product.
On December 23rd 2015 he wrote an email to the Lilium founders titled “The heart says YES - but the mind says NO!”. He said to them where he could help them and that it'd be a process of learning and growing together along the way, but, ultimately, he offered to join their mission.
That investment was viewed with skepticism from his friends: "After announcing our investment I received calls and emails from other investors and even friends asking if this was a joke or if I wanted to experience failure again. Some sent me articles about failed aircraft projects, while others (seriously) offered me a bed and food for a year."
So, with their 500.000€ from Frank, they set out to build within 6 months a half scale aircraft. They hired 8 people into the team and built a 2 seater prototype within 8 months and according to the budget.
The aircraft had a successful first flight, which motivated the team to use that as validation for their next funding round.
// SCALING UP - FLYING HIGHER
Although flying cars were still a sci-fi concept when Daniel first had the idea for Lilium, nowadays there are dozens of companies attempting to come first to the market. However, there are some factors that have allowed Lilium to differentiate themselves from their competitors and with the potential of being leaders in this upcoming market.
Funding, funding and more funding
In order to achieve the vision and to create the ecosystem for air mobility, they need massive amounts of funding. To be operational in 2025, they have to significantly increase the team and scale up production and facilities.
After the first investment from Frank Thelen and the successful initial flight, they were able to raise in 2016 a $10 million Series A round led by Niklas Zennström, founder of Skype. With that amount they increased the team to around 70 employees and worked on the two-seater aircraft.
In April 2017 they hit another milestone: the inaugural flight of the 2 seater prototype. It was a hit in the press and served as proof-of-concept for the next funding.
In September of the same year they announced they had raised a new financing round of $90 million led by the Chinese giant Tencent Holdings. The goal was to use that money to work on the next phase of their plan, the 5-seater electric jet, and significantly increase the team. At the time their target was to have a manned test flight of its 5-seater jet in 2019. And they did it. In May 2019, the 5-seater prototype took off for the very first time.
From then, the company raised an additional $240 million in 2020, with a valuation over $1 billion.
This year, they announced they will list on Nasdaq through a merger with Qell Acquisition Corp. This deal will also provide them with additional $830 million of funding to continue expanding and growing the team. On the same day, they also presented their new 7 seater prototype.
This shows that the road to become a worldwide leader in a new market requires massive amounts of funding with long term vision, as this will take at least 4 additional years until commercialisation, so it needs to have not only team members focused in the future, but also investors aligned with the timeframes of the company.
Prioritising key features - noise and range
As this is a new market, everyone has different perceptions on what it'll require, with each competitor focusing on different aspects.
For Lilium, they have always targeted two main features that they believed were key for adoption in urban environments: having the lowest noise possible and high range.
Their idea has always been to offer high speed transportation to anybody - to become a uber of the skies. They want to be able to deliver connections between city centres, with direct flights of up to one hour. The goal is to provide shuttle flights between high demand locations, with high levels of efficiency and with low noise emission so that I can operate within cities.
Hence the focus on vertical take-off and landing, so that it can be closer to where people are living - backyards, roofs, roads and designated places for landing and take-off. To achieve this, Lilium developed 36 all-electric engines integrated into the wings to reduce drag and optimise efficiency, with a ducted design to provide noise shielding advantage compared to open rotors in traditional aircrafts.
With their unique approach in focusing on regional mobility, they can fly 300km in one battery charge, So they are able to fly from one city to another in one go.
Control the whole user experience
Most of the competitors are working on specific areas - either developing just the aircrafts, or recharging stations or the app for the users to request a flight.
Lilium, on the other hand, wants to have control of the whole user experience.
"By controlling the whole vertical integration you can get a much better customer experience, because you don't have the barriers of different companies in between. You can tailor your app and everything into one brand experience. The other advantage is that it's more profitable, if you run a platform business with aircraft with network effects and the services, it's more profitable and more defensible than being an O&M in that service. Especially it makes sense if you're the only one that has that technology. If you have a very distinguished aircraft technology and performance and architecture, it wouldn't make sense to just sell it and have someone else profiting from that."
Although this strategy takes much longer for commercial release and is very complex, it is the approach the most successful companies in the world have implemented, like Apple, Amazon or Tesla.
Growing a great team and partnerships
From early on, they understood that they can't develop this new market all by themselves - they need partners to achieve this.
This means that Lilium has prioritised investors aligned with their vision and that can help them achieve it. Tencent is a clear example of this, as a Chinese powerhouse, they will help them entering in the Chinese market and connecting to relevant players of aviation regulation.
Early this year, Tom Enders, former Airbus CEO, joined the board of the company, bringing his experience in the aviation industry. Here's what Tom had to say about Lilium:
"Perhaps the thing that has impressed me most about Lilium was that they started with a strong business case and focused from the start on intercity shuttle flights, which allow for higher passenger load factors. I believe with this Lilium is solving the problem of notoriously low load-factors in on-demand air-taxi businesses of the past. It will also help to get ticket prices down and truly democratize electric flight, following Lilium’s mission."
"Lastly, Lilium has also been able to attract very respectable partners for its production and flight operations, a dedicated investor base, and an international management team with seniority and aerospace experience that is unrivalled. Some of the best people I’ve met in my career are working at Lilium."
"Today, Lilium is on its way from visionary start-up to serious aircraft manufacturer and service provider. This is a rocky and by no means risk-free road."
Furthermore, Lilium has also partnered with key industry players to develop the ecosystem.
Early this year, they announced a partnership with Ferrovial, a global leading infrastructure operator, to develop a network of at least ten vertiports across Florida.
Last year, they've partnered with Lufthansa to select and train pilots for Lilium Jet.
Other partnerships include Luxavation, an established operator of business jets and helicopters, who will be responsible for securing necessary approvals and managing pilots, and German airports like Munich, Nuremberg, Dusseldorf, and Cologne/Bonn airports.
With so much to do ahead before its commercial adoption, the future of Lilium and air mobility remains unknown. They will still face many challenges, from manufacturing at wide-scale to international regulation and user adoption.
But it's impossible to not be excited about the possibilities ahead.
Who doesn't want to have a future where you can take your own flying taxi from one city to another? Maybe it doesn't need to happen just in sci-fi movies. Maybe we can experience it as well.
// MAIN TAKEAWAYS
Here are four takeaways from Lilium's growth from an idea while watching YouTube videos to a unicorn company soon to be listed on Nasdaq:
Have a long term vision
If they are able to meet the expected timeframes for commercial adoption, it'll take them 10 years since the company was founded until it's deployed. This implies total alignment between founders, team, investors and partners, all working together with that clear end goal in sight. Lilium could never be a short-term profit business like most SaaS companies - it's a different machine and will need massive amounts of funding and scaling until it achieves that vision.
Make big bets
If you're working on a new market, you can't address all issues - you have to choose the ones that you believe will have the most impact for the success of your business. For Lilium it was having low noise emissions and high range. Both are, in Lilium's approach, crucial to operating in urban environments and to be able to connect cities in a regional level. And it's in those two aspects that they're dedicating more time.
Have control of the whole user experience
Lilium quickly decided that to have a great user experience, they needed to have control in all the stages - from manufacturing to boarding and flying the users. This allows Lilium to tailor everything into one brand experience, as other successful companies like Apple and Tesla do, and maximise profits in the long term.
Partner with key stakeholders
To build a new category like Lilium is doing with regional air mobility, they can't do it all by themselves - they need partners to fulfil this vision. From team members, to investors and industry partners, everyone needs to be aligned so that the company can be operational by 2025.
// GO IN-DEPTH
An article from Frank Thelen, the first investor in Lilium, about the company's journey from 2015 until now with over $1 Billion in funding and planning to be listed on Nasdaq.
"We knew that what they were trying to build was considered science fiction up to that point in time. Even if we did the biggest investment in our funds history, it would only last them a couple of months. The chance of losing our money was absurdly high."
Great interview to Daniel Wiegand where he talks about the early days at Lilium, growing a company and his vision for air mobility.
The evolution of the Lilium Jet, from its first prototype versions in 2016 until the latest successful flight in 2019 of the 5-seater aircraft.
"Imagine traveling from JFK Airport to downtown Manhattan in just 6 minutes, for $70 – the same price as a ride-sharing taxi today. Or imagine how your life might change if you would be able to travel 300km in just one hour, without emitting any emissions. You could live further from your place of work, you could travel further for the weekends, or perhaps visit friends you don’t usually get to see. We call this expanding your Radius of Life.
"But if you extrapolate the potential for each individual and apply it on a societal scale, what you achieve is high-speed connections for communities that have never had it before. The potential to redistribute how and where we live. The opportunity to reduce congestion and alleviate the challenges we face from a growing population. And, of course, it’s a zero-emissions solution too."
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