Aero Technologies, which describes itself as a “next-generation airline company” and currently operates on certain routes in the US and Europe, announced today that it has raised $65 million and $50 million in Series B funding. Led by Albacore Capital Group and $15 million in convertible notes. Expa and Keyframe Capital, as well as new investor Capital One Ventures, participated in this round. The company, which previously raised 20 Series A rounds in 2021, now has a valuation of $300 million.
The company operates 16-seat Embraer 135 regional jets and 13-seat Legacy 600 jets (the commercial version of the Embraer 145), and unlike most of its competitors in this space, the company focuses exclusively on the leisure market. In the US, this currently means flights from Los Angeles and San Francisco to Aspen, Los Cabos and Sun Valley destinations, while the company’s European hub is London, with flights to Ibiza, Mykonos and Nice. The company, which uses private terminals at the airports it serves, will expand its fleet in the coming months and adjust its schedule based on customer demand (seasons).
A typical one-way trip from San Francisco to Los Cabos will set you back about $2,300. That’s significantly more than a first-class seat on a domestic airline, but more affordable than a private jet charter. The average price in the company’s network is about $1,700.
“You get 80% of the cost of private travel for 20% of the cost,” Aero CEO Uma Subramanian told me. “Our customers don’t so much cater to a demographic segment – they actually cater to an interest-based segment. They become premium travelers who settle for experience. They’re looking for a seamless experience, they want convenience and they’re prime customers with premium expectations.
Subramanian noted that business in Europe has seen very little growth in recent months, partly due to the continent’s overall travel chaos, with flights from London to Ibiza and Mykonos often at capacity. In the US, Los Angeles to Aspen and Los Cabos are currently his most popular routes.
“I think we really have a product market because people are really excited about the product,” Subramanian said. I think air travel is something people like to think about and this product is better than the alternatives, right? I think if something is really good and the company is practical and you can have a materially better experience, the product sort of sells itself.
He added that in addition to the company’s partnerships with high-end membership clubs and hotel chains, word of mouth has been a major driver of its business. Interestingly, Albacore Capital Group, which is now leading the Series B round, was introduced to the company by customers before they became investors, she said.
“Aviation is not for the faint of heart,” Subramanian said. “It’s usually a capital-intensive bet where you have to be willing to make it for the long term. So there was no crypto boom – it was hard. Sometimes we wish to raise crypto, but it was about finding the right investors. It was a long process, but we found investors who were very excited about the business and were long on the sector and long on the product.
The company plans to expand the new funding into new markets. Since Aero tends to own the planes, this is obviously a big part of the cost. Suranian did not say which lines the company plans to add, but she emphasized that the company is long on the LA market. Aero doesn’t have many fixed costs on the ground, so it can quickly change its routes as needed. And while other operators are struggling to find enough pilots, Aero’s direct flights model allows them to attract pilots who don’t want the typical airline lifestyle of always returning to their landing site at night.