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Electric-airplane startup Zunum runs out of cash

Dominic Gates, The Seattle Times on

Published in Science & Technology News

SEATTLE -- Zunum, the Bothell, Wash.-based startup developing a small hybrid-electric airplane, has run out of cash, and much of the operation has collapsed.

The company promised to develop a family of small jets to serve lucrative short-hop routes with on-demand air-taxi services. A graphic produced by the company showed three different electric aircraft flying over Seattle: a 10-seat plane; a 50-seat plane; and a 100-seat airliner.

The credibility of the company's Silicon Valley-style pitch for a technology shift that would transform aviation was boosted by investments from Boeing and JetBlue.

But unless new investors step forward, that fanciful dream is dead.

Because the state of Washington provided an $800,000 grant to the company in 2017, Department of Commerce officials Tuesday were able to provide a glimpse into the company's otherwise opaque finances.

To date, only $281,683 of that state grant had been disbursed to Zunum, as it achieved specific milestones and delivered on technology goals outlined in the contract. The company had spent another $1.3 million that came from two outside investors: Boeing's Horizon X venture-capital division and a venture-capital unit of New York-based airline JetBlue Airways.

Department of Commerce spokeswoman Penny Thomas said that Zunum had projected the total cost of the project at $36.9 million. It's unclear if the company founders or others put in any money before the Boeing and JetBlue investments.

When the state awarded the 2017 grant, Zunum was promising it would flight-test a nine-passenger hybrid-electric plane as soon as this year. Earlier this year, Zunum provided a quarterly report to the state that said the project was "off track" because of "delays in investor funding since October 2018."

According to a detailed account of Zunum's failure in Forbes last week, the company laid off nearly all of its 70-person staff in November. About 35 full-time employees were at the Bothell headquarters, an additional 20 at Zunum's electrical power facility in Elgin, Illinois, near Chicago, and about 15 in Indianapolis, developing the plane's ducted-fan propulsion system in a partnership with Purdue University.

Forbes reported that Zunum has vacated the Bothell headquarters space as well as its Indianapolis facilities, and creditors have seized its electric-motor equipment that was under development in Elgin. there are two outstanding unpaid wage complaints against Zunum with the Illinois Department of Labor.

 

In May 2018, Zunum announced a private jet-charter company as a launch customer, and as late as October it was still touting its progress toward inaugurating commercial passenger service in 2023.

On Tuesday, Zunum spokeswoman Meghan Shields said via email that chief executive Ashish Kumar is "not doing interviews right now" but released a short statement:

"Like startups often have to do, we have been navigating a challenging period," Kumar wrote, adding he "remains committed to a future with electric flight."

Thomas said no new invoices for state funds have been received from Zunum this year. The company informed Commerce in April that it did not anticipate hitting any more milestones in the next six months. Last month, Zunum notified Commerce that it is working with a new group of investors with hopes of ramping up activity again soon.

A spokeswoman for Boeing said it is "currently taking a more passive approach to our relationship" with Zunum.

(c)2019 The Seattle Times

Visit The Seattle Times at www.seattletimes.com

Distributed by Tribune Content Agency, LLC.

 

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