E-Go Aeroplanes, UK start-up and developer of the E-Go special light sport aircraft (S-LSA), has become the first UK general aviation aircraft manufacturer to seek funding through an equity-based crowdfunding platform.
In the first funding round, the Cambridge-based company raised £500,000 ($820,000) through 20 angel investors. This money has been used to develop the single-seater – which took to skies for the first time in October.
E-Go says £800,000 is needed to fund the final phase of development. This includes refining its design and manufacturing technique to keep the carbon fibre aircraft under the 115kg (250lb) weight limit required for UK-built deregulated aircraft. The company is also seeking to control manufacturing costs so it can keep the aircraft’s price tag at around £50,000. Deliveries are scheduled to begin in 2015.
“We want to make the E-Go easy to manufacture so that costs can be controlled,” says company executive chairman Malcolm Bird. ‘We also plan to sell the aircraft in the USA so we will have to go through the manufacturing process there. All of these aspects take time and hence money,” he says.
E-Go’s decision to pursue crowdfunding as a source of investment was driven by an overwhelming response to the programme from an array of people.
“We have had a lot of supporters following our project and signing up for regular newsletters, many of whom have expressed an interest in helping in some way or other,” says Bird. “We thought this would give them an opportunity to be part of the project."
The 20 original angel investors have already committed £400,000 for the final funding round and E-Go is now offering up to a further £400,000 of equity to smaller private investors via UK crowdfunding platform, the SyndicateRoom.
“Aviation attracts enthusiasts so this a great way to raise capital for a new programme,” says Gonçalo de Vasconcelos, SyndicateRoom founder and chief executive. “People can invest as little as £500 in the programme or as much as £5,000,” he continues. “This unique hybrid model provides investors with the peace of mind that traditional equity-based crowdfunding platforms do not: the knowledge that each company available for investment has been thoroughly vetted by angels.”
The two leading E-Go investors are entrepreneur Hermann Hauser and Martlet – the investment fund of Marshall of Cambridge.
E-Go plans to produce seven aircraft in 2015, 16 in 2016 and break even in 2017. "This equates to 22 aircraft per year on an annual basis," says Bird.