Archer Aviation made a deal with Boeing that gives the electric vertical takeoff and landing company three businesses in exchange for 19.75% of Archer's pre-close share count, plus two warrants for $100 million of stock apiece.
The three units are Wisk, which designs eVTOLs; SkyGrid, whose software manages air traffic; and Insitu, which builds drones. According to a report by Yahoo Finance, Insitu stands out as the most immediately valuable of the three. It is a profitable business generating $200 million in annual revenue. For context, Archer's second-quarter revenue was approximately $5 million.
Archer has been burning through cash at a significant rate. The company cannot yet operate a commercial air taxi service because FAA-type certification is still pending. That regulatory gap has pushed Archer to look for revenue in places outside its core mission.
The urban mobility market, which includes eVTOL services, is expected to grow into a multitrillion-dollar market over the next several decades. Archer's market capitalization sits at roughly $4 billion. The company's long-term goal is to operate a network of air taxis, moving passengers between vertiports in major cities, in a model compared to what Uber does on the ground.
But the Boeing acquisition introduces a different dimension. Two of the three acquired businesses, Wisk and Insitu, cross into defense and autonomous technology. Insitu's drone work has military applications, and its steady revenue can help fund Archer's operations while the company waits for certification on the civilian side.
Of the three acquired companies, Wisk may carry the most long-term strategic weight. Wisk also designs eVTOLs, which means Archer is absorbing a competitor and gaining additional intellectual property and engineering capacity in its core market. The deal does not require Archer to spend cash it does not have. The transaction is structured entirely in equity, which allows the company to conserve its cash position.
Archer's stock trades on the New York Stock Exchange under the ticker ACHR. The company has not yet disclosed a closing date for the transaction.
