Investors are Betting Big on the 1%’s Commute

This news will not help bring the SPAC-euphoria back down to earth.

On Tuesday, Blade —ahem, Blade Urban Air Mobility — announced a deal to go public by way of reverse merger with “Experience Investment,” a special purpose acquisition company (SPAC) controlled by KSP Capital Partners.

Blade Background

For the uninitiated, Blade was founded by former Sony exec Rob Wiesenthal on the premise that well-heeled New Yorkers would pay almost anything to skip traffic.

Blade ferries customers on short flights (between 60 and 100 miles) to and from places like East Hampton, Nantucket, Westchester, Aspen, Miami and Los Angeles.

Similar to Uber, Blade doesn’t own or operate its own fleet of choppers and planes. The company books seats and markets the flights of licensed third party operators and pilots.

The company boasts that it’s the “most time-efficient, cost-effective and inspiring way to mitigate urban travel pain.”

  • Painless? Sure. After booking your flight by app, a car service takes you to the closest helipad. On-site Covid-19 testing and luxury lounges await on both ends.
  • Cost-effective? Less clear. The “Blade Bounce” flight will get you to JFK in five minutes for $195. The 40 minute trip from Manhattan to East Hampton will set you back $795.

The Pandemic Adds (Jet) Fuel to Blade’s Tank

According to the press release, the transaction will value Blade at $850 million, well above its most recent valuation of $140 million in 2018.

While the pandemic has devastated the travel industry, Blade had a booming summer thanks to NYC elite’s new commuting habits. (Notably, Uber Copter has been suspended during the pandemic).

Blade’s cash cow was always weekend jaunts out of the city. But now, New York executives are using the service to hop between the midtown and the Hamptons on a near-daily basis, according to Bloomberg.

  • Weisenthal told the outlet that around 35% of customers who round-trip to Manhattan in a day don’t bring any luggage, suggesting they’re choppering in just for a day of work.
  • Thirty minute trips to uplaces like Montauk have created “synthetic suburbs” in areas that used to be un-commutable.
  • Blade’s recently launched $965 Hamptons “commuter pass,” which lets customers buy unlimited trips for just $295, sold out within hours for September and October.

The Takeaway? There is at least one feel-good angle here. Blade is the largest transporter of human organs in the Northeast, helping to reduce the costs and transport time for hospitals and patients in need.