Archer Aviation CEO delves into the strategy behind Anduril deal

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HEAR FROM THE AIR CURRENT

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Archer Aviation has always had a knack for timing.

In February 2021, Archer became the first electric vertical take-off and landing developer to announce plans to merge with a special purpose acquisition company (SPAC). The short-lived SPAC bubble was still inflating at that point, and Archer’s swift move to take advantage of the craze helped it secure a high-profile partnership with United Airlines and a $600 million private investment in public equity. That committed funding catapulted it ahead of dozens of other eVTOL hopefuls, and it remains among the handful of leading players in the space nearly four years later.

Archer’s announcement on Dec. 12 that it has entered into an exclusive agreement with Anduril Industries to jointly develop a next-generation hybrid VTOL aircraft for defense purposes suggests that it hasn’t lost its talent for reading the tea leaves. Anduril is on the ascent, having earlier this year beat out major defense primes Boeing, Lockheed Martin and Northrop Grumman to advance in the U.S. Air Force’s Collaborative Combat Aircraft program. (Anduril’s senior VP of engineering, Shane Arnott, spent more than two decades at Boeing before leaving in 2021.) Moreover, investors’ appetite for funding defense tech is strong, as evidenced by the $430 million in additional equity capital that Archer raised in conjunction with the Anduril deal to help support its new Archer Defense program.

Then there is the fact that incoming President Donald Trump and his close advisor, SpaceX CEO Elon Musk, are perceived as especially friendly to new entrants in aerospace and defense who are focused on moving faster and more affordably than their predecessors — an impression that Archer is happy to reinforce.

“I do think the new administration is going to be very positive toward groups like this that are trying to do these kinds of things,” Archer CEO Adam Goldstein said in an interview with The Air Current to discuss the rationale and strategy behind the Anduril deal. “It’s not just picking the old teams just for the sake of it because they always did it — it’s, let’s go see what new groups can do. And I think that’s going to be a very nice tailwind for the whole industry.”

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