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Boeing, AE Industrial Partners to launch second venture fund
Global Banking & Finance Review®
Company
By David Shepardson and Tim Hepher
FARNBOROUGH, England (Reuters) – Boeing Co said on Wednesday it had agreed to invest $50 million in AEI HorizonX, expanding a partnership established with private equity firm AE Industrial Partners to invest in aerospace technology startups.
The new funding will anchor AEI HorizonX’s second venture fund (Fund II), which plans to raise $250 million “to support promising start-ups in future mobility, space, sustainability, digital enterprise applications, networks and security.”
Boeing, which like many aerospace companies had historically used in-house venture funds to tightly control technology development, launched HorizonX in 2017 as a venture capital arm to invest in early-stage companies.
Last year, Boeing spun it off to forge a broader external investment fund managed by AE Industrial Partners, an aerospace-specialist private equity firm with $5 billion under management.
Boeing said in a press release that some AEI HorizonX portfolio companies have made progress in zero-carbon aircraft propulsion systems; passenger entertainment; and safety and cyber security for commercial and defense aircraft.
Marc Allen, Boeing’s chief strategy officer, told Reuters the new fund would invest in technologies like mobility, sustainability, space and communications: “everything that goes into the new industrial technology to support aerospace”.
Asked whether investors remained supportive of aerospace after share prices sank when travel demand tanked during the pandemic, Allen said, “The positive disruption that technology is playing across the industrial landscape is clear.”
He added: “You can’t do better than to buy in when a market is at the bottom. Of course, after COVID, aerospace is just staring at a great big growth curve in front of it.”
Since 2021, the AEI HorizonX portfolio has had five initial public offerings and exits. Its portfolio features 51 global investments in areas including AI and machine-learning.
Among the original HorizonX’s investments was a $20 million stake in Richard Branson’s suborbital tourism venture Virgin Galactic, which flew the billionaire British businessman to the edge of space last year.
Both Boeing and Airbus forecast strong underlying airplane demand, while new threats are driving up defence demand. But supply chain problems persist.
Aerospace supply chains “have to get more efficient, more digital, more connected,” Allen said in an interview.
(Reporting by David Shepardson and Tim Hepher; Editing by David Gregorio)
Venture capital is a type of private equity financing that is provided to early-stage, high-potential growth startup companies. It involves investing in companies in exchange for equity, or ownership stake.
Sustainability in finance refers to the practice of making investment decisions that consider environmental, social, and governance (ESG) factors. It aims to create long-term value while minimizing negative impacts on society and the environment.
A partnership in business is a formal arrangement where two or more parties agree to manage and operate a business together. Each partner contributes resources and shares in the profits and losses of the business.
Technology in finance, often referred to as FinTech, encompasses the use of technology to deliver financial services. This includes innovations like mobile banking, online trading platforms, and blockchain technology.
A startup is a newly established business, typically in the early stages of development. Startups often seek funding to grow and scale their operations, usually focusing on innovative products or services.
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