The aerospace industry has seen major growth and development in the last decade. Over the course of 10 years, huge developments have taken place and are continuing to grow. Numerous startups and well-known companies are working together to make the aerospace industry one of the most important in the whole world. But, in order to get all the things going, huge investments and capital are required for every company out there.
Without the right financial help, it becomes almost impossible for any company, be it a startup or a multi-million business firm, to carry out the objectives they have in mind. This is even more true in the case of startups and newbies. That is why aerospace venture capital firms hold significant importance in the overall success of the aerospace industry over the last decade. In today’s blog, we are going to talk about aerospace venture capital and it’s other aspects.
Buying, selling an aerospace company or looking for some investment/ strategic advices? Connect with the expert that you need
Merger & Acquisition in the Aerospace & Defense Market
Merger & Acquisition in the industry of aerospace and defense is one of the most common business strategies that is being followed. Several companies across the globe are following this strategy to benefit themselves. One of the biggest reasons why it is important is that it helps the big names in the industry to grow faster than their smaller competitors. Thus, capturing a larger share of the aerospace market.
Determination and hard work are the two most important elements that can drive any organization or startup to move forward. There are two options in this case – organic growth and inorganic growth. In terms of organic growth, it is really time-consuming as the process is more natural. But, inorganic growth in the form of merger and acquisition helps to expand more rapidly and their portfolio improves faster.
Acquisitions in the industry may not be of the same sector, but can also be indifferent sectors around the world. This helps to add more technological innovation and knowledge in order to meet customer demand at the highest levels. But, it comes with disadvantages as well.
The biggest disadvantage is that a wrong merger or acquisition can lead to massive debts, which makes way for long term losses. It can affect the overall financial structure and economy of any company in a serious manner.
Many companies in the aerospace and defense industry are following the strategy of merger and acquisition in order to get the success they want. Over the years, we have seen many aerospace startups and companies taking over their weaker counterparts and that leads them to greater ability to work on their goals and achieve their targets.
What Are Venture Capital?
Venture capital is an institutional or private investment that is usually made into very or early-stage startup companies. As we already mentioned, it involves huge risks in terms of debts and financial structure, but it can also benefit a company to achieve better innovations, ideas and professional members.
In simple words, venture capital is the money that is invested when a business is still small or is existing only in terms of an initiative. Big companies offer venture capitals to those startups which offer tremendous potential for growth and profits in the near future.
People or companies who provide the capital are known as Venture Capitalists. One can become a Venture Capitalist by buying the majority of the shares in the proposed company. Risk Capital or Patient Risk Capital are other names given to venture capital.
Venture capital surely involves a huge risk, but everything in the world of business is a risk. That is why it is a great strategy for many private investors and companies to follow this rule of merger or acquisition and take over smaller competitors and remove them from the equation.
Now that you are aware of what venture capital is, take a look at the basic difference between Venture Capital, Private Equity and Investment Banking in the following segment.
Venture Capital vs Private Equity vs Investment Banking
Venture capital, as you already read, is the capital that is invested in order to take over a lesser-known company or small initiative, that holds significant potential in the future. It is followed by big names in the market who want to grow and expand their business even more and help their needs to be met in the coming days. Even though it posses a huge risk, there is always a greater chance of better returns.
On the other hand, private equity is an investment class that consists of capital that does not gets listed on the public exchange. It is majorly composed of funds and the investors directly invest their money into the company. Mostly, institutional and retail investors are the ones who provide the money for private equity. This new capital can be used for bringing in new technology, equipment, bolster resources or in any other way which helps the company. Private equity does not mean taking over another company just like venture capital.
Investment Banking is a lot different from the other two forms of investments mentioned. It is a very specific division of the banking sector that is involved with the overall creation of the capital for different companies or the government. Banks related to investment banking underwrite the new debt and many equity securities that are used to aid the sales of securities and also facilitates the merger and acquisition strategy.
So, as you can see, these are the major differences between Venture Capital vs Private Equity vs Investment Banking. You need to keep in mind that, just like any other industry, all these forms of investments and strategies are also seen in the aerospace and aviation industry big time.
Top Aerospace Venture Capital
In 2020, there are several aerospace venture capital firms who are always interested to invest and help new startups with financial aid. Take a look at this list of the top aerospace capital firms.
Safran Corporate Ventures – established in 2015, success drives Safran Corporate Ventures to help other companies relieve their dreams. It funds startups that have received breakthrough and hold the immense potential of growth in the future. They are always ready to help those companies who are working around the year to revolutionize the aeronautics and aerospace industry in a significant manner.
Airbus Ventures – popular in the aerospace industry for helping the early- and increasingly, in growth-stage companies, Airbus Ventures are helping startups to achieve their goals. Their curators and professional experts provide first-hand help to the early-stage startup companies to guide them on how to survive in the industry and keep working on their goals and objectives over time. Airbus is one of the most popular venture companies in USA.
Collins Dale Venture Firm – when it comes to sectors like Commercial, Private and Cargo Aircrafts, Aircraft Components, Satellites and Vectors and IT and Electronics for Aerospace, Collins Dale Venture Firm offer amazing Merger and Acquisition strategy to startups. They help those companies who come up with new innovations and ideas that can change the industry significantly for the good.
Honeywell Capital Venture Firm – Honeywell invests in their partner companies who can help them to accelerate and achieve their vision. They invest in a wide range of sectors which also includes aerospace and aviation industry. The company makes sure that their partners are in a close affinity of revolutionizing the industry together.
Boeing horizonX – the company turns new business ideas into reality and offers amazing support to newly formed companies in the market. They provide excellent access to research and development resources, global networking and customers to these startups. Boeing horizonX hosts numerous internal and external incubators in order to provide financial support to the new startups.
Jet Blue Venture – Jet Blue Venture is a leading venture branch of the JetBlue Airways. Their mission has always been to provide investment and support to the early stage aviation startups who are dedicated in providing the best technology for travel, transportation and also hospitality.
Founders Fund – The corporate strategy of Founders Fund is hugely based on innovation and transformation of the industry. Other benefits that are provided by Founders Fund include – access to an international network with leading experts, global commercial outreach, financial development agreements, etc.
Khosla Ventures – with more than 8 fully ventured startup companies in under their name, Khosla Ventures have an impressive portfolio that consists of several startups around the world which show great value. They also help startups who plan to work on other sectors of the industry that includes AI, robotics, clean technology, etc.
Lux Capital – The team of young and highly-qualified engineers at Lux Capital is working with several startups from a different region to come together and help them financially and professionally to expand their business in the aerospace industry and market. Their ventures have benefitted a lot of startups in the aerospace industry over the course of the last few years.
Data Collective – aiming to provide high quality support and venture capital to different startups around the world, Data Collective have already created the Rocket Lab they launched several successful satellites into the orbit and also delivers a wide range of rocket systems and technology.
Bessemer Venture Partners – with over 117 IPOs Bessemer Venture Partners have generated over $2.4 billion in venture capital. They have helped numerous startup companies to achieve their dreams. Their main focus of investments has been on mobile, Aviation and e-commerce.
Andreessen Horowitz – this venture capital firm has over 36 rounds of funding in the previous year and generated over $300 million in capital fund. These funds are directed to newly formed companies who are mainly in the finance and aviation industry.
Draper Associates – a global investment venture company, Draper Associates helps early stage startup companies to get the financial support they need in order to work on their objectives over time. Formed in 1985, in the past few decades they have successfully raised over a billion dollars for helping entrepreneurs around the world.
Y Combinator – Y Combinator invests in a large number of startup companies who promise to deliver an industry changing potential. Since the year of 2005, they have funded over 2000 startups. The combined value of all the companies they have helped calculates to more than $100 billion.
Shasta Ventures – Shasta Ventures is an early stage investor partnering venture, lead by a team of dedicated and passionate professional members who want to deliver the industry with groundbreaking inventions. Their investment period is ideally for 3 months for early stage businesses and an average range of investment is anywhere between $175,000 – $350,000. It can be even more depending on the startup ideas.
Space Capital Partners – solely dedicated to the development and growth of newly formed aviation startups, Space Capital Partners have an estimated net funding of over $1 billion since they were established. They work year round to come together and collaborate with most promising aerospace startups in the country.
True Ventures – With over 17 rounds in the past year in 2019, True Ventures have deployed a total of $459.4 million since they were formed in 2006. On an average they have $27 million in funding per round. True Ventures mostly focuses on mobile enterprise, aerospace and aviation. True Ventures are one of the most reliable venture capital firm in the United States.
Promus Ventures – a fairly new company that had come to light and have helped quite a few startup companies in the aviation, aerospace, robotics and mobile industry, Promus Ventures has less than 3 rounds of funding round every year. But their team works really well in order to bring the early stage startup brands get in touch with investors who are really interested in their work and objectives for the future.
RRE Ventures – RRE Ventures have hosted around 8 rounds in the past year and was able to deploy $131.3 million in total of funding. They have over $16.4 million average funding per round. Their main focus of investments are towards Cloud Computing, Aviation, Consumer Electronics, Crowdsourcing, Advertising Platforms, etc.
DFJ Venture Capital – one of the oldest capital venture firms in the United States, the DFJ Venture Capital is a well known name in this industry. They have over $300 million of public funding in different startups that are majorly based on software and aviation.
Tencent – established in China, Tencent is one of the largest software and technology company in the world with over 10,000+ employees. Founded 22 years back in 1998, they have successfully raised over $82 million in funding over the years. Majority of the startups they support with their finances are based in China, USA and India.
Bee Partners – based in USA, Bee Partners is a venture capital firm that has invested around $10 million in different startup companies with less than 3 major funding rounds. The companies they focus on belong to Crowdsourcing, Enterprise Software, Sales and Marketing and Aviation.
GGV Capital, Venture Investors, Tekes, SequoiaCapital, Canaan Partners, Qualcomm Ventures, Innovation Endeavors, Base Ventures, Lockheed Martin, Autodesk, OurCrowd, Seraphim Capital, Capricorn Investment Group, Lemnos Labs Inc, BlueRun Ventures, Playground Global, Charles River VC, Lifeline Ventures, First Round Capital and the Saudi Royal Family are some other venture capital firms around the world which have provided amazing and relentless support to new startup companies.
So, these are the top aerospace venture capital firms which you need to know about. There are several other companies in the market as well, but we believe that these are the best when it comes to providing venture capital in aerospace.
Buying or selling an Aerospace company
Willing to buy or to sell an Aerospace or Defense business and you need some advices? Looking for a person with extensive knowledge in the Aerospace & Defense market and that have the experience in Merger & Acquisition in your local area?
Aerospace Export regroups experts from all location with all type of skills (sales rep, M&A consultant, lawyers, government officials, Investors…). We specialized in supporting the organic and external growth of Aerospace & Defense companies. Our experts could be helpful, so please don’t hesitate to contact us. We will assist, advise and connect you with our network for FREE.
AerospaceExport Job Services
AerospaceExport’s team provide a Personal coaching and a job application service. Our Job Application Service is an easy way to send your application to hundreds selected companies (including Boeing, Safran, Airbus, GKN, …) in one simple process.