As the ambitious air taxi startup Lilium faces potential insolvency, a wave of support is rising from over 650 German founders and investors, urging the federal government to step in and provide crucial financial backing. The stakes are high, and the future of this innovative Bavarian company hangs in the balance.

The Struggles of Lilium

Lilium, which made headlines for its groundbreaking electric vertical takeoff and landing (eVTOL) aircraft, has been in talks with the German government for more than a year, seeking state support to secure its future. Reports from Der Spiegel indicate that these discussions have taken a turn for the worse, with state aid now seemingly off the table.

The situation is dire: Lilium requires immediate capital to avoid insolvency. Founders and investors, including prominent figures like Daniel Metzler of Isar Aerospace and Bastian Nominacher of Celonis, have united under the initiative “Enable loans for Lilium, strengthen Germany as a deep tech location.” Their message is clear: Germany must invest in its startups to maintain its position as a leader in deep tech innovation.

A Collective Voice for Change

The German Startup Association has taken a strong stance, emphasizing the importance of supporting Lilium and similar ventures. The association highlights that if Germany wants to compete globally in the deep tech arena, it needs to invest in startups that are developing transformative technologies.

In a statement, the association underscored its ambitious goal: “We want to make our country a globally leading deep-tech location by 2030.” This vision acknowledges the capital and research intensity required for deep tech but also points to the critical role such industries play in shaping Germany’s future as an innovation hub.

Seeking a Lifeline

Despite having notable early backers like Atomico, Earlybird Venture Capital, and Tencent—Lilium went public via a SPAC in 2021—the company is now navigating a challenging financial landscape. It has been in discussions with both the federal government and the Free State of Bavaria, aiming for $100 million in loan guarantees.

Bavaria has already committed to supporting Lilium with a €50 million loan, contingent upon federal support for the same amount. However, resistance within the German Bundestag, particularly from the budget committee, threatens to derail these plans, according to reports.

In its most recent financial statements, Lilium indicated that it has garnered approximately €32 million from existing investors to address immediate liquidity needs. However, much of this funding hinges on whether the federal government decides to provide state aid.

The Cost of Inaction

The German Startup Association has been vocal about the broader implications of the federal government’s decision. Christoph Stresing, managing director of the association, warned that failing to support Lilium could have lasting repercussions beyond just the company’s collapse. “This could seriously damage Germany’s reputation as a deep-tech location, with long-term costs that are hard to quantify,” he stated.

In a recent LinkedIn post, Lilium CEO Klaus Roewe emphasized that the request for a fixed-rate loan of €100 million is not merely a rescue operation for a struggling company. Rather, it is a critical signal to investors that Germany is committed to fostering innovation in electric aviation. “The loan is fully repayable, and its terms are highly advantageous for KfW [the German state-owned investment bank] and for Germany as a whole,” Roewe explained.

He expressed optimism that securing this loan would mobilize additional private investment from both domestic and international sources, creating a ripple effect of financial support for the company and the sector.

Looking Ahead

The clock is ticking for Lilium, and the outcome of this situation could set a precedent for how Germany supports its deep tech startups in the future. The collective outcry from the startup community highlights the urgent need for government action to ensure that innovative companies like Lilium have the resources to thrive.

As the nation grapples with its priorities, the message from over 650 founders and investors is clear: Investing in Lilium is not just about saving one company; it’s about safeguarding Germany’s future as a leader in deep technology and innovation.

Conclusion

The call for state support for Lilium encapsulates a larger conversation about Germany’s role in the global tech landscape. As startups increasingly rely on governmental backing to navigate challenging economic waters, the decisions made today could shape the trajectory of innovation for years to come. With the right support, Lilium could not only survive but also pave the way for a new era of sustainable transportation.