Chinese flying car startup HT Aero has raised $500 million as part of a new round of funding as it pushes to popularize its technology.

Why it matters: HT Aero, an Xpeng-affiliated company, said the fund is the largest venture funding round for a startup in Asia’s passenger flying vehicle sector to date, according to a Tuesday press release. 

Details: Electric vehicle maker Xpeng Motors led the Series A funding round, along with Chinese venture capitalists IDG Capital and 5Y Capital.

  • A number of other new investors also jumped on board, including Sequoia China, Eastern Bell Capital, and GGV Capitals. HT Aero saw its valuation rise above $1 billion before the investment.
  • The Guangzhou-based aviation startup plans to use the proceeds to develop a new version of its flying vehicles for both low-altitude air travel and road driving, scheduled for release in 2024, founder Zhao Deli said in the press release.  
  • “The investment in HT Aero will further accelerate the build-up of our ecosystem to integrate driving and flying,” Xpeng chief executive He Xiaopeng said.

Context: HT Aero in July unveiled its latest electric passenger drone, Voyager X2, featuring a flight time of 35 minutes and a maximum speed of 130km per hour (around 80mph). Yet the company has no plans for mass production of the two-seater flying vehicle prototype, for now, Caixin (in Chinese) reported Wednesday, citing a company representative.

  • The technology is still at an experimental stage, making market valuation difficult. Morgan Stanley estimated the global autonomous urban aircraft sector to be worth $1.5 trillion in a report published in May 2020. However, they cut this figure to $1 trillion earlier this year.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen