March 24, 2020

Engine fires and coronavirus: How Lilium managed to raise $240m in tough times

Last month its prototype aircraft caught fire. Now coronavirus will halt all test flights. But Lilium has still managed to raise a new round.

Maija Palmer

3 min read

Image of Lilium Jet prototype plane flying

Last month, its prototype plane caught fire. Now coronavirus will put further test flights on hold. But Lilium, the German startup planning to build an “Uber of the skies” fleet of electric flying taxis, has still managed to raise a $240m funding round from internal investors.

It’s a sign that, despite the tough circumstances, deals can still be closed. The funding round was actually brought forward as investor Tencent, having seen first hand how coronavirus had brought Asian economies to a standstill, wanted the deal done before the same happened in Europe. Lilium’s other investors include Atomico, LGT and Freigeist.

Lilium has yet to finish the investigation into the fire which burned the prototype plane beyond repair.

“It is lucky we were so close to finalising the round. If you were starting to look for $240m now, it would be a different story,” said Oliver Walker-Jones, Lilium’s head of communications. He doesn’t expect the coronavirus epidemic to affect the development schedule for the aircraft, although physical building work and any test flights will have to be put on pause, possibly for several months.


A bigger problem, potentially, is the fire. Lilium has yet to finish the investigation into why its prototype plane, the one that recently completed a test flight at 100 km/hour, caught fire last month during ground maintenance. The prototype was burned beyond repair (luckily no one was hurt) but Lilium says the issue is unlikely to put back its plans to launch commercial flights in 2025.

Lilium are not commenting on possible causes at this stage. But Sifted's take is that the fire is likely to have been caused by a battery. Lilium uses the same type of batteries as are used in electric vehicles, and almost every car manufacturer making electric cars has suffered battery fire problems at some point.

There have been a number of fires in electric planes in the last few years, however, raising the question of whether aircraft using lithium-ion batteries can really be made safe. Eviation’s electric plane caught fire during testing in January, while an electric plane built by Airbus crashed in Norway last year, and an electric aircraft built by Siemens tragically crashed and killed both occupants in 2018.

Aerospace standards are so much higher than in the car industry because there are no lay-bys in the sky.

Walker-Jones admits Lilium may face tough questions from aviation safety regulators about ensuring that electric aircraft can control these kinds of battery fires. “Aerospace standards are so much higher than in the car industry because there are no lay-bys in the sky,” he says. If an electric car catches fire you can pull over to the side of the road and jump out — there isn’t that option in an aircraft.

Battery problems have also plagued bigger aviation companies like Boeing, which has had repeated battery issues on its flagship Dreamliner aircraft, forcing it to ground the fleet for several months in 2013.

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Lilium’s new $240m round will be used to continue building and testing the new prototype plane as well as for kitting out the factory it is building to manufacture the aircraft at scale.