The air taxi startup Volocopter wanted to come to the New York stock exchange Nasdaq with a big deal, but the plans failed. The crowdfund investors are now going almost empty-handed.
The 750 crowdfund investors had been waiting for the news since the summer. The email in which the air taxi startup Volocopter would finally concretize its plans on the stock exchange . “With forty times their stake” small investors could count on a successful IPO, wrote the Handelsblatt in July. Once the donors had financed the start of the daring project.
A few months later, the crowd’s dream has now burst. Volocopter has canceled its IPO, according to investor letters that are available to Capital and Finance Forward and that investors received on Thursday evening. It should be a so-called SPAC-Deal. A listed company shell would have bought the air taxi builder in order to put him on the Nasdaq Stock Exchange in New York. A non-binding declaration of intent has already been signed, according to the Volocopter management in the summer.
Subdued reactions on the market
Now the management writes:
“Unfortunately, the facts and figures in the last few weeks and months have made it more than clear that the current point in time is extremely unfavorable for a successful SPAC transaction”.
Above all, the IPOs of the competitors contributed to this. The reactions of investors there were restrained.
With a SPAC deal, investors in the shell of the company can return their shares if they don’t like the company they have bought. Two thirds of the investors in the German competitor Lilium have made use of this right.
“As a result, some transactions were just able to pay the transaction costs with the money they earned, but no further capital was left for company growth,”
writes CEO Reuter. The risks of a corresponding transaction are therefore too high.
For the approximately 750 small investors, the news could hardly be worse. The cancellation of the SPAC deal means for them that they will come out as good as empty.
Volocopter terminated the loan from the Seedmatch crowdfund investors in June with effect from December 31, 2021. Even then, investors went to the barricades: They feared that they would be pushed out of the company before the big exit ( Capital reported). In this case, they would only have been entitled to repay their loan plus one percent interest. To smooth things over and save face, Volocopter therefore offered them a supplementary agreement. This means that the crowd should participate in the amount of their previous participation quota in the SPAC if it is initiated by the end of the year. With the abandonment of the SPAC plans, that is no longer necessary.
The crowd investors from the very beginning are upset for this reason.
“The interest rate of one percent does not even cover the inflation rate,” says Seedmatch investor Andreas Ewald. “We first-time investors feel ripped off. We can’t understand why such a successful startup leaves us out in the rain. Without us first-time investors, Volocopter would ultimately never have been able to take this successful path. “
Many also see the Volocopter case as a failure of the crowdfunding platform Seedmatch.
“For Seedmatch this is a total disaster. Now at the latest it becomes clear: The crowdfunding contracts are so bad that they are nil attractive, ”says an investor who wants to remain anonymous. Another explains: “The topic of crowdfunding has been dealt with for me.”
Kai Thierhoff, owner of a start-up consultancy firm in Cologne and also an investor, sees it similarly.
“It is really bitter. The contracts were very unfortunate for us “
Volocopter once owed a lot to its crowd investors. When the startup was looking for initial funding more than eight years ago, many still thought the air taxi idea was a pipe dream. The founders confessed in an interview that the chance of a bank loan was correspondingly low.
In November 2013, Volocopter started a campaign on the German crowdfunding platform Seedmatch – back then under the name e-volo. Co-founder Stephan Wolf promised:
“In the end, we will reward the investors appropriately.”
The prospect of writing aviation history with Volocopter and also earning a generous return convinced the crowd. The startup reached its funding target of 1.2 million euros within three days. The total of 750 small investors invested amounts between 250 and 10,000 euros. For the return that they now receive, they could have put their money in less risky investments.
A possible showcase crowdfunding investment case has turned into a chilling example within months. Even in the Volocopter company, which is successful on paper, small investors do not participate. A company spokeswoman referred to the confidentiality of the contracts – and did not want to comment in detail.
“We always make sure that Volocopter fully fulfills its obligations to lenders as well as other investors or partners,” said Volocopter.
One of the makers of the IPO is already out of the boat: the Bruchsal-based company also brought in the manager René Griemens to go on the capital market. He left the management team at the end of October.
Source: FINANCE FWD