Lateral Capital Management, LLC

Acme Air Freight

Acme Air Freight (AAF) is building a new unmanned aircraft which will move freight across the Pacific. Their aircraft is a single-wing plane with four huge prop engines. It is designed to deliver 100,000 lbs. of freight from Shanghai to Los Angeles at a cost midway between ships (which take 4-5 weeks) and current airfreight. They claim to have orders from freight haulers for multiple planes. The planes will be built from carbon fiber using commercial boat building technology. We were unable to invest, because the company has so many options from bigger, more breathless investors.

  • Assessment:Talk about a big idea, and a picture of the Acme airplane comes to mind. All to be built from existing technology (e.g., Rolls Royce engines, in production for 50 years) backed by experienced airplane people with a prototype ready to fly. The business model practically falls into your lap, in no small measure because of two conceptual innovations: The plane has no pilots and it takes off and lands from water. Surprisingly, the FAA sees this as a low risk applicatoin of auto-pilot technology.
  • Outcome:Too soon to tell. We looked to participate in a $5MM round which would support their first generation plane – a “mini-hauler” that would prove the un-piloted concept can work on a routine basis. But the company decided not to raise outside money, in favor of (our guess) an investment from a mega-founder like Elon Musk.
  • Learning:We have learned there is a class of Early Stage investment which captures the imagination so quickly; which is so obviously disruptive that we will not be able to touch them.