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Startup Obituary : Lilium
Ram Gangisetty
November 12, 2025
🚀 The German eVTOL Pioneer That Promised to Revolutionize Regional Travel
In 2015, four Technical University of Munich students founded Lilium with a bold vision: make electric air travel as accessible and affordable as taking a train. By 2021, they had raised €1.5 billion, gone public on NASDAQ, and secured orders for 780+ aircraft from major airlines.
Yet by November 2025, Lilium was dead. After two bankruptcies in four months, never achieving a manned flight, and burning €10 million per month, the company's intellectual property was sold to US competitor Archer Aviation for just €18 million — barely 1% of what investors had poured in.
"The intention we had with Lilium is to create a transportation system that does the same job like a highspeed train, but independently of the community size."
Daniel Wiegand, Co-founder and CEO
🎬 Act I: Munich, Electric Jets, and a Dream Takes Flight
It started in 2015 when Daniel Wiegand — a glider pilot since age 14 — gathered three fellow TUM students for a spaghetti dinner in his shared flat. Their idea: an all-electric vertical takeoff and landing (eVTOL) aircraft with 36 ducted fans that could connect any city at 300 km/h.
The name came from Otto Lilienthal, the German aviation pioneer. As Wiegand explained: "He had a dream that, one day, instead of walking or using horse carriages, we would be flying through the air as our main means of travel."
By 2017, Lilium had achieved its first full-scale prototype flight. The momentum was building.
💰 The Funding Frenzy:
2019: €90M Series B (Tencent, Atomico)
2021: $830M via SPAC merger with Qell (NASDAQ: LILM)
2023: €227M additional funding
Total raised: €1.5 billion
🚪 The Product: Revolutionary Tech Meets Reality
Lilium's aircraft was genuinely innovative. Unlike competitors using open rotors, Lilium's 36 electric ducted fans promised:
Quieter operation
300 km range
280 km/h top speed
7-passenger capacity
The ability to land on rooftops ("Lilypads")
The company secured impressive partnerships:
Saudia Group: 50 jets + 50 options
Lufthansa: European operations partnership
Total backlog: 780+ conditional orders
But there was one problem: the aircraft never flew with humans aboard.
📉 Warning Signs and Technical Challenges
2020: A prototype caught fire during maintenance. The company never fully explained the incident.
2023: Despite receiving EU Aviation Safety Agency's Design Organization Approval, manned flight tests kept getting delayed.
The Battery Problem: Critics questioned whether Lilium's power-hungry ducted fans could achieve the promised range. Wiegand defended the technology but later admitted:
"One of the challenges we faced was that we were initially a bit naive about the scope and cost of developing something like this. I think our first estimate was for a smaller sports aircraft in the $50 million to $100 million range."
Daniel Wiegand
💸 The First Collapse: October 2024
The house of cards tumbled when the German federal government refused a €50 million loan guarantee. Without it, matching funds from Bavaria were blocked.
"We had already conditionally secured additional private capital to complement the KfW loan. However, the Budget Committee was unable to agree on the loan, and Bavaria couldn't do it alone."
Klaus Roewe, CEO (replaced Wiegand in 2022)
German politician Frank Schäffler defended the decision: "The risk for the federal government is far too high. If Bavaria wants to take on this subsidy, then it should do so alone."
October 24, 2024: Lilium GmbH and Lilium eAircraft file for insolvency. 1,000 employees laid off.
🧨 The False Rescue and Final Implosion
December 2024: Mobile Uplift Corporation announces a €200 million rescue deal. But the money never materialized — particularly €150 million promised by Slovak investor Marian Bocek.
Employees went weeks without pay. Some turned to GoFundMe campaigns for basic expenses. As one insider told Gründerszene: "Trust has been destroyed too much."
February 14, 2025: Lilium files for bankruptcy again. Operations cease permanently.
October 2025: Archer Aviation acquires Lilium's 300+ patents for €18 million, beating a higher €30 million bid from Ambitious Air Mobility Group.
🔥 The Aftermath
Lilium's collapse triggered a domino effect across European aerospace:
Competitor Volocopter entered insolvency
Airbus paused its air taxi project
Supplier Customcells filed insolvency due to unpaid Lilium bills
Meanwhile, US and Chinese competitors advanced:
Joby Aviation secured DOD contracts
EHang began autonomous passenger flights in China
Archer acquired Lilium's technology portfolio
Scorecard: Lilium
Dimension | Score | Reasoning |
|---|---|---|
Product-Market Fit | 2/5 | Strong market interest (780+ orders) but product never reached commercial viability. No manned flights despite €1.5B investment. |
USP | 4/5 | Genuinely innovative ducted fan technology. Longer range and higher speed than competitors. EU certification progress showed technical merit. |
Timing | 3/5 | eVTOL market was heating up. But certification timelines and battery tech weren't ready for Lilium's ambitious specs. |
Founder Fit | 2/5 | Strong technical vision but admitted naivety about costs/complexity. Replaced as CEO in 2022. No prior aerospace experience. |
Team (Execution) | 1/5 | Burned €10M/month with no revenue. Two bankruptcies. Never achieved manned flight. Lost talent to competitors. |
🧠 Lessons for Founders & VCs
🧪 Deep Tech ≠ Software: Lilium's founders thought they could build revolutionary aircraft for $50-100M. Actual cost: 15-30x more. Hardware is hard.
🏛️ Government Relations Matter: While US competitors secured defense contracts and Chinese rivals got state backing, Lilium's government loan rejection triggered its collapse.
💰 Burn Rate Discipline: €10M/month burn with zero revenue isn't sustainable, even with €1.5B raised. Match spending to milestones, not ambition.
📊 Orders ≠ Revenue: 780+ conditional orders looked impressive but meant nothing without a certified, flying product.
🌍 Ecosystem Dependencies: Unlike software, aerospace needs suppliers, regulators, and government support. Lilium couldn't build everything alone.
🎯 Don't Let Perfect Be the Enemy of Good
Lilium's 36-ducted-fan design may have been technically superior, but competitors with "inferior" open-rotor designs are now flying passengers while Lilium's patents sit in Archer's portfolio.
🌐 The Broader Implications
Lilium joins a growing list of European deep-tech failures, raising questions about the continent's ability to compete in capital-intensive industries. As investor Frank Thelen observed: "We are a nation of skeptics. Instead of supporting innovative young companies and visionary founders, we suffocate their innovative ideas with our skepticism."
Perhaps that skepticism could have saved €1.5 billion. Or perhaps it became a self-fulfilling prophecy.
I hope this story highlights the unique challenges of deep-tech startups and the importance of matching ambition with execution capabilities.
It took considerable research to compile this comprehensive analysis. Thank you for your appreciation by sharing on your social channels.
Cheers,
Ram
👉 My simple ask: It took hours to put together this post for you. I hope you forward this email to at least one founder friend or share on your social channels 🙏.
Startup Obituary is for educational purpose only not a business advice.
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