Why we invested in Sarla Aviation

May 15 th, 2024 - Traditional aircrafts, which use gasoline engines, emit large quantities of carbon dioxide, nitrogen oxides, and particulate matter, all of which contribute to climate change and air pollution. Advanced Air Mobility (AAM) refers to developing and integrating new air transportation systems and technologies into existing urban infrastructure, to replace existing fossil fuel-based urban air mobility (UAM) modes. An EVTol (Electric Vehicle Take-off and Landing) or a ‘flying taxi’ is an example of a new and breakthrough drone technology that is designed to move passengers and cargo more efficiently and sustainably in congested urban areas, to replace fossil fuel-powered helicopters.

Advantages of eVTOLs as Urban Transport

The typical eVTOL aircraft has 12 electric rotors (each with its controller) which can be mounted on two wings. By using multiple smaller rotors (which also helps reduce the noise), there are backup rotors to continue the flight in case of failure of one of the rotors. A helicopter, by contrast, has only two rotors (with only one gasoline-powered source). Most helicopters have hundreds of single points of failure, and as a result, are mechanically complex. Therefore, while eVTOLs have fewer than 10 moving parts, this mode of transportation is safer, more convenient, and quieter in the urban mobility space.

Furthermore, eVTOLs will have the potential to cut travel time when compared significantly to regular automobile transport in urban areas, with the initial cost expected to be similar to the premium luxury ground rideshare options, such as Uber Black or Uber Comfort. However, as the service expands on a larger scale, the pricing may become more affordable, comparable to Uber X.

The environmental benefits of eVTOLs, primarily their zero-emission, energy-efficient electric propulsion systems, align with the broader goals of reducing the carbon footprint of the aviation industry. In principle, eVTOLs can travel the shortest distance between points, and their relatively modest sizes enable near-point-to-point service, thereby significantly reducing carbon emissions when compared with other means of mobility. When comparing fully loaded eVTOLs (3 passengers) with ground-based cars with an average occupancy of 1.54 passengers, eVTOL greenhouse gas emissions per passenger kilometers traveled are 52% lower as opposed to internal combustion engine vehicles (ICE) and 6% lower when compared to battery-electric vehicles (EVs).

Global Tailwinds to Boost the Commercialization of eVTOLs

In April 2024, Chinese eVTOL company EHang received the production certificate from the Civil Aviation Administration of China (CAAC) for its electrically powered two-seater passenger drone EH216-S. The certificate paves the way for the manufacturer to start series production and it is the first production certificate in the global eVTOL industry.

In the US, United Airlines is one of the first partners for eVTOL manufacturer Archer Aviation and has already ordered 200 electric air taxis, and is working on assessing viable routes for the taxis. InterGlobe, the largest shareholder of IndiGo, is expected to form a joint venture with US-based Archer Aviation this year and launch electric air taxis in India in 2026, a top executive told Mint. The company expects to receive certification from the US aviation regulator Federal Aviation Administration by the end of 2025 and plans to partner with IndiGo, Ola, and Uber to expand its reach in the country.

In the United Arab Emirates, Dubai is aiming to revolutionize public transportation by introducing air taxis by 2026, through an initiative led by the Dubai Roads and Transport Authority in partnership with JOBY Aviation and Skyports Infrastructure. The trials for the air taxis are already in progress, and they are seen as a practical solution to Dubai’s traffic congestion challenges.

The Directorate General of Civil Aviation (DGCA) under the Ministry of Civil Aviation, is the main regulatory body for the AAM sector in India. Recently, the European Union Aviation Safety Agency (EASA) and DGCA signed a collaboration letter in July 2023, where the two sides agreed upon a working arrangement to establish regulations for eVTOLs. The Department of Science and Technology under the Government of Gujarat has also partnered with Skydrive, a Japanese eVTOL manufacturer, to integrate eVTOL technology and develop the AAM ecosystem by 2027.

In addition, US eVTOL major AIRO Group entered into a partnership with helicopter operator FlyBlade India to launch eVTOL operations in the country by 2027. Sarla Aviation’s Positioning in the eVTOL Market as an OEM player in this sector, Sarla’s value proposition therefore has been to solve 4 factors in replacing helicopters in urban mobility: i) safety hazards; ii) noise externalities; iii) reduction of the areas which is required by helipads which will soon be replaced by vertiports; and iv) a more sustainable, greener form of transportation when compared with both fuel-powered helicopters and ICE vehicles on the road.

Sarla Aviation’s Positioning in the eVTOL Market

As an OEM player in this sector, Sarla’s value proposition therefore has been to solve for 4 factors in replacing helicopters in urban mobility: i) safety hazards; ii) noise externalities; iii) reduction of the areas which is required by helipad which will soon be replaced by vertiports; and iv) a more sustainable, greener form of transportation when compared with both fuel-powered helicopters and ICE vehicles on the road.

Sarla’s aircraft is a passenger eVTOL vehicle, not a cargo vehicle, for which the payload is higher and the safety considerations are more stringent, but there is a much larger addressable market for passenger transport when considering airlines and fleet operators as their key customers. In the last seven months of operations, the company has already achieved a 25% airborne subscale prototype model. The 3-member founding team brings a strong and complementary set of skill sets in product design, hardware, and engineering, from global aviation companies such as Lilium and Joby. We’re excited to work in partnership with this fantastic team to build an exciting and differentiated business, and to make eVTOL aircraft a mainstream form of transportation in India.

Theia Ventures is proud to join Sarla Aviation’s pre-seed round led by Campus Fund with participation from strategic angels, to catalyze a green transition for urban air mobility.