In a time when global conflicts and shifting alliances are reshaping the defense landscape, one U.K.-based startup is stepping up with a thrilling new vision. Vertical Aerospace, best known for developing next-gen flying vehicles, is now aiming to transform from an air-taxi innovator into a serious defense contender across Europe.

A Powerful Opportunity

With Russia’s invasion of Ukraine and Donald Trump’s wavering stance on NATO commitments, Europe is pouring funds into homegrown defense technologies. Startups across industries are seizing this rare moment and Vertical Aerospace is perfectly positioned to lead.

Already known for its VX4 electric vertical takeoff and landing (eVTOL) aircraft, Vertical has racked up over 1,500 pre orders from giants like American Airlines, Japan Airlines, GOL, and Bristow. But the real excitement begins now: Vertical has officially announced plans to develop a hybrid-electric variant of the VX4, expanding into defense and logistics.

CEO Stuart Simpson said,

“We always knew this aircraft would be defense-capable because of the nature of it,”

This hybrid VX4 is designed for a range of up to 1,000 miles that’s 10 times the current eVTOL range. Quiet, heat-resistant, and capable of remote or autonomous missions, it’s a natural fit for military operations. Vertical is working with Honeywell, which develops autonomous systems for the U.S. military, to build out flight control and management systems for its aircraft.

Rising with the Defense Tide

Vertical isn’t alone in eyeing defense. In December 2024, California-based Archer Aviation launched a dedicated defense unit and partnered with weapons manufacturer Anduril to create a hybrid-electric aircraft. That move secured Archer an additional $430 million in equity from existing investors. Still, Simpson clarifies that Vertical’s announcement isn’t timed for convenience. We’ve been working on this hybrid aircraft in stealth for 18 months.

Europe’s Defense Surge

The timing couldn’t be better. In the last few years, Europe’s defense scene has exploded. In 2023, the sector attracted $1 billion in venture capital 5 times more than in 2018. New funds have emerged, including a €1 billion NATO Innovation Fund and Estonia’s €100 million SmartCap defense fund. Even Lithuania plans to invest 5% to 6% of GDP into defense, backing startups through its sovereign VC Co Invest Capital.

Amid this boom, Vertical stands virtually alone in the European eVTOL defense market. With Germany’s Volocopter bankrupt and Lilium shutting down, Vertical sees itself in a unique position to fulfill Europe’s growing defense needs.

Funding the Future

To make it happen, Vertical will need more capital. So far, it has raised $468.8 million, mostly through its 2021 reverse merger and later PIPEs (private investments in public equity). In January, it raised another $90 million via a second direct public offering.

By comparison:

  • Joby Aviation has raised $2.82 billion
  • Archer Aviation has raised $3.36 billion
  • Beta Technologies has raised $1.15 billion

Simpson said

“We’ve been spending about $100 million a year. Our competitors have been spending $400 million to $500 million. We’ve been developing, within our $100 million spend envelope, this hybrid. We are incredibly efficient and focused.”

For context, Archer’s operating expenses in 2024 hit $500 million, partly due to legal issues with Boeing and Wisk Aero. Joby’s expenses were even higher, nearly $600 million.

Focus Before Scale

Vertical isn’t rushing into mass production. Certification is expected by 2028, and until then, the focus is on smart, lean development.

Simpson said,

“You can burn a lot of money by going to build and get a load of robots, This is not something you want to robotize. These are highly, highly complex. What you need to do is understand how you build them, and then you build a few hundred of them manually. Then you simplify, standardize, and automate.”

Vertical plans to finish its first certified pre-prototype of the VX4 next year and build several more for testing. The hybrid powertrain will be integrated into this new generation VX4, with flight tests scheduled to begin next year. Currently, all Vertical’s flight tests are piloted due to strict UK regulations. While Joby and Beta have completed piloted tests, Archer hasn’t yet though it’s expected soon.

Vertical has yet to land a military customer, but discussions are well underway. Simpson said

“We’ve had a lot of deep, meaningful discussions with government agencies and customers. But we’re the only European player in space. So it gives us a really unique position.”