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Wheels Up Raises $117.5 Million in Equity Capital; Claims Billion Dollar Unicorn Valuation

Wheels Up Joins VistaJet, JetSuite, Victor and Jet Smarter in raising money to fund ambitious expansion plans

 

Ka-ching. Jet card membership seller Wheels Up said earlier today it had completed an equity capital raise of $117.5 million. The money comes less than four months after the company said it had received a $90 million aircraft financing facility from KKR. Wheels Up said AccorFidelity Management & Research Company and funds and accounts advised by T. Rowe Price Associates, Inc. led this current round and were joined by existing investor, NEA as well as new institutional investors. The company initially set out to raise $100 million but agreed to upsize the offering based on significant investor demand, according to a press release. Wheels Up is now valued at close to $700 million, with an enterprise value north of $1 billion, again according to the company. 

 

Founder and CEO Kenny Dichter said the new money will fund growth initiatives, including adding to its fleet of Beechcraft King Air 350i aircraft; accelerating membership growth through further investment in sales and marketing; continued exploration of and planning for an expansion into Western Europe and other markets; and significant enhancement of the its digital platform. Wheels Up is also looking at adding Citation X aircraft to its private fleet of King Air 350i and Citation Excel/XLS, starting as soon as the first quarter of 2018.

 

Earlier this year Dichter told an aviation gathering in Wichita he envisions growing the company to “20,000 sticky members” by 2020.

 

Wheels Up is not the only private aviation provider that has been raising money.  In September, Victor, an online-focused charter broker, reported it had secured $10 million from BP Investments as part of a $20 million round of fundraising. Meanwhile, charter and jet card veteran Rick Sitomer quietly engineered a reverse takeover using StarJets International to serve as the platform for acquisitions. In an exclusive interview with Private Jet Card Comparisons, he said his goal is to build $100 million in revenues.

 

That’s not it. In August VistaJet said it had received $150 million from Rhone Capital, which the operator said gave it an equity valuation of more than $2.5 billion. Earlier in August, JetSmarter announced it had raised an undisclosed amount of money from Clearlake Capital Group, L.P., Leucadia National Corporation and existing investors. Last November JetBlue said it had made a small investment in JetSuite, Inc.

 

Perhaps the interest is the jet card, charter, private shuttle and membership program providers is not surprising. AINOnline, a leading B2B newspaper covering private aviation, just released its annual Charter Market Report for 2017 with the headline, “The industry is climbing.” It said the U.S. charter market saw a 10% increase in flights and a 12.7% increase in flight hours. The report noted that Avinode, an online charter marketplace, has seen a nearly 50% surge in trip quote requests so far this year.

 

Still, many in the industry are cautious. The Chapter 11 filing last month of Singapore and Los Angeles based Zetta Jet which was accompanied by accusations of fraud, including using company funds to purchase expensive houses, cars and yachts, is still generating water cooler discussion that not all business models out there are necessarily viable. Still, the financing tap for private aviation concepts is apparently very strong.

 

Private Jet Card Comparisons provides registered subscribers information on corporate ownership structure, the number of employees, company location, CEO name as well as escrow account options as part of its comparisons covering over 100 programs and 65 variables.