Archer just raised $300m—here’s how it’s set to transform military aviation

Archer Aviation Inc. has secured $301.75 million in equity financing from leading institutional investors, including funds managed by BlackRock, reinforcing its strong financial standing and fuelling the next phase of its hybrid aircraft development. This capital infusion, which brings Archer’s total liquidity to approximately $1 billion, is strategically positioned to accelerate the growth of its hybrid-propulsion, vertical take-off and landing (VTOL) aircraft, with a keen focus on both the defense sector and broader commercial applications.

Archer’s financial stability has long been considered one of the strongest in the emerging electric aviation industry. This latest funding round not only strengthens its balance sheet but also solidifies its role as a key player in the global push towards sustainable, advanced aircraft technologies.

Why Is Archer Targeting the Growing Defense Market?

In December 2024, Archer launched its dedicated defense division, Archer Defense, marking a pivotal shift towards military aviation. The move comes as demand for next-generation aircraft in the defense sector continues to surge, driven by the need for more agile, efficient, and adaptable aerial solutions. Archer’s first defense product will be a hybrid-propulsion VTOL aircraft, designed to meet the rigorous demands of modern military operations, including enhanced mobility, reduced logistical footprints, and increased operational flexibility.

Adam Goldstein, Archer’s founder and CEO, highlighted the unexpected scale of opportunities within the defense industry, noting that the potential market is “substantially larger” than initially projected. This realisation prompted the decision to raise additional capital to invest in advanced manufacturing capabilities, particularly in areas critical to military applications, such as composites and battery technologies. These innovations are expected to significantly enhance the performance, durability, and efficiency of Archer’s aircraft, positioning the company to capture a substantial share of the expanding defense market.

What Role Does Advanced Manufacturing Play in Archer’s Growth Strategy?

Archer’s growth isn’t limited to defense applications. The company’s broader strategy focuses on scaling production capabilities to support both military and commercial aviation demands. A key milestone in this journey is the completion of its state-of-the-art ARC manufacturing facility in Covington, Georgia. This 400,000-square-foot facility, strategically located near Covington Municipal Airport, has received its certificate of occupancy, with tooling load-in already underway ahead of initial production scheduled for early 2025.

The ARC facility is designed to be the cornerstone of Archer’s manufacturing operations, with plans to produce its flagship Midnight aircraft, an all-electric VTOL designed for urban air mobility. Archer aims to ramp up production to two aircraft per month by the end of 2025, with long-term goals of scaling output to 650 aircraft annually by 2030. This ambitious target is supported by a strategic partnership with Stellantis, which will serve as Archer’s exclusive contract manufacturer. Stellantis brings to the table advanced manufacturing expertise, capital investment, and a seasoned workforce, all of which are critical to achieving Archer’s aggressive production goals.

Georgia Governor Brian Kemp praised the economic impact of the ARC facility, emphasising its role in creating high-quality jobs and positioning Georgia as a leader in advanced manufacturing. Congressman Mike Collins, a member of the House Committee on Transportation and Infrastructure, also highlighted the project’s potential to drive technological innovation and economic growth in the region.

How Does Archer’s Financial Strategy Support Its Long-Term Vision?

Archer’s robust financial strategy is a cornerstone of its long-term success. Alongside the $300 million funding announcement, the company released preliminary financial results for the fourth quarter of 2024, reflecting strong operational performance. Archer reported GAAP operating expenses ranging from $120 million to $140 million, with non-GAAP operating expenses aligning with guidance at $95 million to $110 million. Importantly, Archer expects non-GAAP operating expenses in the first quarter of 2025 to remain consistent with these figures, indicating disciplined cost management amid rapid expansion.

The recent equity financing involved the sale of 35.5 million shares of Archer’s Class A common stock at $8.50 per share, based on a volume-weighted average price. The net proceeds from this offering will be used to fund the development of next-generation aircraft technologies, particularly in areas related to batteries and composites, which are critical for both defense and commercial applications. The remainder of the funds will support general corporate operations. Moelis & Company LLC served as the exclusive placement agent for this offering, ensuring a strategic alignment with Archer’s financial objectives.

What’s Next for Archer in 2025 and Beyond?

With its financial foundation stronger than ever, Archer is well-positioned to capitalise on emerging opportunities in both the defense and commercial aviation sectors. The company’s hybrid aircraft are set to play a transformative role in the future of air mobility, offering sustainable, efficient, and versatile alternatives to traditional transportation methods.

Archer’s focus for 2025 includes scaling production at the ARC facility, advancing its defense aircraft development, and securing key certifications from the Federal Aviation Administration (FAA) to support commercial operations. The company is also expanding its international footprint, with strategic initiatives such as the launch of a cross-industry consortium in the United Arab Emirates (UAE) aimed at fostering global collaboration in advanced air mobility solutions.

Archer’s ability to seamlessly integrate hybrid aircraft development, advanced manufacturing capabilities, and strategic partnerships sets it apart in the rapidly evolving aviation landscape. As defense contracts and commercial opportunities continue to expand, Archer’s innovative aircraft are poised to redefine the future of flight.