Venture Capital and Autonomous Flight for the Flying Car Revolution

Pamir Sevincel

4 Aug 202302:18

Summary

TLDRAs a partner at Quartz Capital, a London-based VC fund, the speaker emphasizes three key aspects of autonomy in the venture capital perspective: its necessity for improving unit economics in air transport sectors, the importance of incremental rollout to generate revenue, and the urgent need for increased funding. With only 5% of $15 billion invested in advanced air mobility going to autonomy, the speaker highlights the significant capital and certified hardware required for this transformative technology.

Takeaways

🚀 Autonomy is seen as essential for improving unit economics in various applications such as air taxis, cargo flights, and emergency medical services.
📉 Replacing pilots with passengers in air taxi applications can potentially reduce the cost per trip by 50%, according to a McKinsey report.
🔍 Venture Capital firms like Quartz Capital believe in the incremental rollout of autonomy to ensure revenue generation in the short to mid term.
🛫 Incremental introduction of autonomous features into the cockpit without immediately removing the pilot is a strategic approach for investors.
💰 There is a significant need for more funding in the autonomy space, with only 5% of the $15 billion invested in Advanced Air Mobility going towards it.
💼 The speaker, a partner at Quartz Capital, emphasizes the importance of hardware certification in cockpits for the practical implementation of autonomy.
🌐 The investment landscape for Advanced Air Mobility has seen substantial growth, with over $15 billion invested in the last decade.
🔢 The majority of the investment in Advanced Air Mobility has been in areas other than autonomy, with a focus on small drones, larger EV toll platforms, and enabling technologies.
🛑 Autonomy is not just a software solution; it requires certified hardware integration for safe and effective operation.
🔑 The speaker highlights the long-term nature of achieving full autonomy, suggesting a gradual approach is more practical and beneficial for revenue generation.
🌟 Quartz Capital, based in London, is actively involved in the Venture Capital space, focusing on investments that consider the potential of autonomy.

Q & A

What is the perspective of Venture Capital on the concept of autonomy?
-Venture Capital, as represented by the partner at Quartz Capital, views autonomy as essential for improving unit economics in various applications such as air taxis, cargo flights, and emergency medical services.
How does replacing a pilot with a passenger in air taxi applications affect unit economics according to the McKinsey report mentioned?
-The McKinsey report suggests that replacing the pilot with a passenger can reduce the unit economics for a single trip by approximately 50 percent, making it a significant game changer for the business model.
What is the recommended approach for implementing autonomy in the industry according to the speaker?
-The speaker recommends an incremental rollout of autonomy, introducing features and products gradually into the cockpit without immediately removing the pilot, to generate revenue in the short to mid term.
Why is incremental implementation of autonomy important for investors?
-Incremental implementation is important for investors because it allows for revenue generation in the short to mid term, providing a more immediate return on investment.
What is the current state of investment in the Advanced Air Mobility sector over the past decade?
-Over the past decade, there has been more than 15 billion dollars invested in the Advanced Air Mobility sector, covering everything from small drones to larger EV toll platforms and enabling technologies.
How much of the 15 billion dollars in investments went into autonomy?
-Only five percent of the 15 billion dollars, which amounts to a little more than 700 million dollars, went into autonomy across seven to eight companies.
What is the main challenge in attracting more funding for autonomy in the Advanced Air Mobility sector?
-The main challenge is that autonomy is not a pure software play; it requires certified hardware in the cockpits, which is a more complex and costly endeavor compared to software-only solutions.
What is the role of Quartz Capital in the context of the discussion on autonomy?
-Quartz Capital is a Venture Capital fund based in London, and the partner speaking in the script represents the fund's perspective and investment strategy regarding autonomy in the industry.
What are the three main considerations for Venture Capital when evaluating autonomy?
-The three main considerations are the necessity of autonomy for reducing unit economics, the incremental rollout of autonomy, and the need for more funding to support the development and certification of hardware for autonomy.
How does the speaker suggest the industry should approach the development and implementation of autonomous technology?
-The speaker suggests a gradual approach, introducing autonomous features incrementally and ensuring that the necessary hardware is certified for use in cockpits to effectively roll out autonomy.
What is the significance of the 50 percent reduction in unit economics for air taxi applications mentioned in the script?
-The 50 percent reduction signifies a substantial improvement in the cost-effectiveness of air taxi operations, making them more viable and potentially more competitive in the market.

Outlines

00:00

🚀 Importance of Autonomy in Venture Capital Perspective

The speaker, a partner at Quartz Capital, a London-based VC fund, discusses the significance of autonomy from a venture capital standpoint. They emphasize three key considerations: the necessity of autonomy to reduce unit economics by up to 50%, as suggested by a McKinsey report, making it a game changer for business models in sectors like air taxis, cargo flights, and emergency medical services. The second point is the incremental rollout of autonomy, suggesting that a gradual introduction of autonomous features can generate revenue in the short to mid-term without immediately removing pilots from the cockpit. Lastly, the speaker highlights the need for more funding in the autonomy space, pointing out that only 5% of the $15 billion invested in Advanced Air Mobility over the last decade has gone into autonomy, amounting to just over $700 million across a few companies. The challenge is that autonomy requires certified hardware, not just software, which demands significant investment.

Mindmap

Keywords

💡Venture Capital

Venture Capital (VC) refers to the financing provided by firms or individuals to small, early-stage, innovative companies in exchange for an equity stake or ownership in the company. In the context of the video, the speaker is a partner at a VC fund, which indicates that they are involved in investing in startups with high growth potential. The video discusses how VCs view the concept of autonomy in the context of business models and technological advancements.

💡Autonomy

Autonomy in the video refers to the ability of a system or vehicle to operate independently without human intervention. It is a key concept because it is seen as essential for improving unit economics in various applications such as air taxis, cargo flights, and emergency medical services. The script mentions that autonomy can significantly reduce costs and transform business models.

💡Unit Economics

Unit economics is the analysis of the costs and revenues associated with producing one unit of a product or service. In the video, it is highlighted that introducing autonomy can reduce the unit cost of air taxi trips by 50 percent, making it a critical factor for investors to consider when evaluating the financial viability of a business.

💡McKinsey

McKinsey is a global management consulting firm known for its research and reports on various industries. The video cites a McKinsey report to support the claim that replacing a pilot with a passenger in air taxis can lead to significant cost savings, illustrating the impact of autonomy on unit economics.

💡Incremental Rollout

Incremental rollout refers to the gradual introduction of new features or products. The speaker suggests that autonomy should be implemented in stages rather than all at once, allowing for the integration of autonomous features into existing systems without immediately removing human pilots. This approach is considered beneficial for generating revenue in the short to mid-term.

💡Advanced Air Mobility

Advanced Air Mobility (AAM) is an emerging field focused on the development of air transportation systems that are more efficient and sustainable. The video discusses the investment landscape of AAM, including small drones and larger electric vertical takeoff and landing (eVTOL) platforms, which are part of the broader push towards autonomous flight.

💡Investment

Investment in the video pertains to the financial backing required to develop and implement autonomous technologies. It is noted that only a small fraction of the total investment in AAM has been allocated to autonomy, indicating a need for more funding to accelerate the development and certification of autonomous systems.

💡Certification

Certification in this context refers to the process of obtaining official approval for hardware and software systems to ensure they meet safety and performance standards. The video emphasizes that autonomy is not just a software solution but also requires certified hardware in cockpits, which is a significant barrier to entry for companies in the AAM space.

💡Unmanned Traffic Management

Unmanned Traffic Management (UTM) is a system for managing the operations of autonomous aerial vehicles. It is one of the enabling technologies mentioned in the video that has received investment, highlighting the need for comprehensive infrastructure to support the operation of autonomous aircraft.

💡EV Toll Platforms

EV Toll Platforms refer to electric vertical takeoff and landing platforms, which are part of the eVTOL aircraft category. These platforms are designed for urban air mobility and are mentioned in the video as one of the areas that have attracted significant investment, indicating their importance in the future of autonomous flight.

💡Quartz Capital

Quartz Capital is a venture capital fund based in London mentioned by the speaker as the organization they are a partner of. It serves as an example of the type of investors that are interested in and funding the development of autonomous technologies within the AAM sector.

Highlights

Autonomy is considered necessary for improving unit economics in various applications such as air taxis, cargo flights, and emergency medical services.

A report by McKinsey suggests that replacing the pilot with a passenger in air taxis could reduce the cost per trip by 50 percent.

Autonomy in the aviation industry should be implemented incrementally to ensure revenue generation in the short to mid term.

The transition from zero to full autonomy is expected to be a long process, emphasizing the need for gradual feature introduction.

Investors, including those at Quartz Capital, are interested in the incremental integration of autonomous features in the cockpit without immediately removing the pilot.

The Advanced Air Mobility sector has seen over 15 billion dollars in investments over the last decade, including drones and EV toll platforms.

Only 5% of the 15 billion dollars invested in Advanced Air Mobility went into autonomy, highlighting the need for more funding in this area.

Autonomy in aviation is not purely a software solution; it requires certified hardware in the cockpits for implementation.

The speaker is a partner at Quartz Capital, a VC fund based in London, indicating the perspective of the venture capital world on autonomy.

The importance of unit economics is emphasized as a key factor in the business model for air mobility services.

Incremental rollout of autonomy is suggested as a strategy for revenue generation and technological adoption.

The need for more funding in the autonomy space is underscored, with a specific call for investment beyond the current levels.

The current investment in autonomy is disproportionate to the overall Advanced Air Mobility investments, indicating an opportunity for growth.

The speaker highlights the importance of hardware certification in the cockpits as a prerequisite for autonomy in aviation.

The transcript provides insights into the venture capital perspective on the necessity and implementation of autonomy in air mobility.

The discussion suggests that autonomy could be a game-changer for the economics of air mobility services.

The speaker advocates for a balanced approach to autonomy, combining incremental technological integration with immediate economic considerations.