Expanding operations: Flapper series A extension raises $6m
Flapper has raised $6m in a Series A extension that will allow it to expand operations away from pure technology.
In addition to the $2m equity round raised in 2021, the latest raise, led by private-equity fund DXA Invest and alternative investments fund Arien Invest, will be invested technology and flight operations, including acquisitions and a fractional programme. Other investors include Investidores.VC and SMU.
Paul Malicki, Flapper’s CEO (pictured second from left), told Revolution.aero: “For us it means switching from purely technology and sales-based business models to a more operational role. We are facing a challenging model in the global economy and are happy to have built a war chest that will allow us further growth.”
Flapper plans to direct some resources to a fractional management programme, allowing owners to buy shares in selected jets and turbo-props the firm intends to operate indirectly.
It is very likely the fractional programme will be launched by year-end, said Malicki. “But the main challenge is still the software technology. We are working on a more robust user interface after having implemented new payment gateways and localised fully our app to three languages – with more to come.”
The Brazilian market requires operation of multiple aircraft models – turbo-props and jets – because the local market is “extremely diverse”, according to Malicki.
“Latin America has the highest share of billionaires owning a private aircraft, which proves that it’s an essential business tool. Ideally, we would like to work with Embraer Phenom 300 and King Air series, but I can tell you that we are already working on incorporating a Hawker under our partner’s certificate,” he explained.
The lead investor DXA, which previously invested in Brazilian cargo airline Modern, is not new to both technology and aviation. Oscar Decotelli, CEO, DXA said that private aviation in Latin America represents a stable and high performing sector, yet it remains underserved. He believes Flapper has the potential to become the NetJets of Latin America.
In 2021, Flapper increased its year-on-year revenues by 2.5x, while its gross profit grew three-fold in comparison to 2020. It reported a profit in the first quarter 2022 and now counts as many as 350,000 mobile app downloads.
Flapper estimates the value of the air charter in Latin America to be about $2bn, with the global market exceeding $10bn. Flapper’s own research demonstrates that its main market Brazil has more than 40,000 air charter clients for charters and 2.7m potential by-the-seat clients.
Mexico, the world’s third largest business aviation market, has recently surpassed Brazil in the number of private jets, but it remains behind in terms of turbo-props and helicopters. Malicki argues that the electrification of aviation can triple the size of the general sector, offering access to new and previously abandoned routes and landing spots.
Later this year Flapper will be launching flights from Buenos Aires, Argentina to Punta del Este, Uruguay. It will be one of many occasional launches of seasonal flights, said Malicki. “But within the ‘social aviation’ space we bet more on empty legs, which can be easily commercialised by-the-seat. Other than that, I am skeptical about any company successfully building a large-scale (global) semi-private flights service. They will go dust within the coming years,” he says.
Well capitalised, Flapper has no plans for a Series B. “Also, because our HQs are in Brazil, we have a huge cost advantage, access to qualified resources and have won the battle with some 12 competitors already. So, any capital raise is pure growth capital for us right now.”