• Thu. Jun 30th, 2022

Maker of $777,000 flying motorcycle prepares for IPO in Japan | Business

ByRandall B. Phelps

Apr 11, 2022
NEW DELHI: A former Merrill Lynch derivatives trader with a passion for Star Wars is preparing to go public with his flying motorcycle startup in Japan.
Tokyo-based ALI Technologies Inc. was founded by Shuhei Komatsu as a drone maker in 2016 before moving on to bigger plans, opening sales of its Xturismo Limited bike in October. The $777,000 one-person transporter can reach a top speed of 80 km/h (50 mph) and travel for up to 40 minutes per charge, according to the company. The bike has so far featured largely as a curiosity at public events such as a recent baseball game, but ALI President Daisuke Katano says it is attracting strong interest from of Middle Eastern countries.
“The need for these bikes will be higher in desert locations or other difficult terrain,” Katano said in an interview. “The vehicle will allow people to travel where the roads are bad and inaccessible to cars, as well as across bodies of water.”
The company has selected lead underwriters for an initial public offering on Tokyo’s mother market for startups in what will be the first such launch in the country. It is currently engaged in discussions with the Tokyo Stock Exchange, Katano said, declining to specify an estimated valuation or timeline for the offering.
Flying personal vehicles were part of science fiction for decades before Star Wars, which featured a famous racing scene with pods zooming near ground level. Electric air travel is now getting closer to reality as the first wave of designs from startups like Joby Aviation Inc. come of age and developers are reaching out to investors for funding. Billions of dollars poured into the sector in 2021, along with a staggering number of orders, mostly from commercial airlines. The next 18 months will be crucial for the fledgling industry as manufacturers conduct vital test flights and finalize plans for so-called vertiports and regulators consider how best to ensure safety.
The ALI bike is not intended to fly far through the air, mainly helping to traverse inhospitable terrain. It’s built like an enlarged drone with a traditional motorcycle seat and steering on top.
Komatsu’s founder described his goal as achieving an “air mobility society,” where cars, bicycles and other vehicles can carry people through the skies.
ALI has attracted investment from several well-known Japanese companies, including Sega Sammy Holdings Inc., Nagoya Railroad Co., Nakanihon Air Service Co., Kyocera Corp. and Mitsubishi Electric Corp. Soccer star Keisuke Honda, who played for the national team at the 2018 World Cup, is also a backer. ALI’s drones were the first thing to attract investors, but the startup is also developing capabilities in artificial intelligence and blockchain technology, a Nagoya Railroad spokesperson said.
“There are growth expectations, so once products like these hit the headlines, the company’s shares could be repurchased, which would be boosted by retail investors,” said analyst Tomoichiro Kubota. market principal at Matsui Securities Co. “But the company is not yet at a level where people could talk about detailed earnings outlook, which makes it difficult to identify an appropriate valuation figure.
While a successful IPO will make ALI the only listed company in Japan specializing in next-generation air mobility, several peers are already trading on New York stock exchanges. This includes Joby, Archer Aviation Inc., Lilium NV and Vertical Aerospace Ltd.
Joby, which has a market capitalization of more than $3 billion, is set to bring to market what the industry calls eVTOLs, or electric vertical take-off and landing aircraft. These flying taxis are battery-powered and, according to the companies, intended to fly unmanned once regulations allow.
“Air mobility companies listed in the United States have fairly large market capitalizations,” Katano said. “If you consider our company to be of the same type, I think we can gain understanding from investors for a decent valuation.”
ALI will aim for a unicorn valuation — $1 billion or more — over the long term, Katano added. But the company has yet to decide how best to categorize its vehicle, which will depend on discussions with local regulators where the product is sold.
“We think our planes could be classified differently than existing planes,” Katano said. “It does not travel on the ground, but always flies closer to the ground and at low altitude.”