Category: Amazon Tech

Harvard grad and former pro hockey player Kyle Clark’s startup Beta is on the verge of bringing workhorse battery-powered cargo planes to America’s skies that can take off and land like helicopters.

When he played minor league hockey in the early 2000s, Kyle Clark says his teammates would spend the long bus rides talking about the drugs they’d taken last night and who’d brought a hooker into their hotel room. Clark, a bruising 6-foot-6 enforcer, would bury his nose in textbooks on how to build airplanes. Pretty nerdy – but he’d even stood out as an engineering egghead in the locker room at Harvard, where his teammates had nicknamed him Beta.

Clark never made the NHL, but 20 years later, his startup Beta Technologies is valued at a billion dollars and is on the cusp of making the major leagues with Alia, a potentially groundbreaking electric aircraft.

Alia, whose gracefully angled 50-foot wingspan Clark says was inspired by the long-flying Arctic tern, is one of a slew of novel electric aircraft that aviation upstarts are building that take off and land vertically like a helicopter.

Virtually all of Beta’s competitors, including billionaire Larry Page’s Kitty Hawk and the SPAC cash-rich Joby Aviation, aim to transport people, enabling urbanites to hopscotch over traffic-snarled city streets. But Clark designed Alia primarily as a cargo aircraft, betting that a big market will develop for speeding ecommerce to and from suburban warehouses long before air taxis are considered safe to allow over city streets.

“We’re actually going to win at the passenger game because by the time others are doing passenger missions we will have thousands of aircraft, millions of flight hours and a safe, reliable, vetted design,” says the 41-year-old Clark, whose company is based in his hometown of Burlington, Vermont.

Clark is also spooling up what he thinks will be a lucrative second business: charging stations for electric aircraft of all types that he plans to dot around the country to create the aviation equivalent of Tesla’s supercharger network. There are nine up and running already, in a line from Vermont to Arkansas, with another 51 under construction or in the permitting process.

Most will contain banks of used batteries from Alia aircraft, removed when their capacity has declined about 8%, giving them a profitable second life while Beta sells Alia owners replacement packs at about a half a million a pop. Equipping the charging stations with battery storage will avoid the need for expensive upgrades to the local power grid: Clark’s plan is for them to fill slowly at off-peak times, while unneeded power can be sold back at peak to utilities.

“The aircraft is the sexy part but we’re going to make big money off batteries,” says Clark.

Beta investors Fidelity Management and Amazon are hoping the company will repeat the success of another electric vehicle startup they’ve bankrolled whose market cap recently topped $100 billion. “They see a lot of parallels between Beta and Rivian,” says Edward Eppler, a former Goldman Sachs investment banker who joined Beta as CFO after working on its Series A round, which raised $368 million in May at a $1.4 billion valuation. Forbes estimates Beta’s revenue over the past 12 months at $15 million, mostly from U.S. Air Force research contracts.

The cash infusion came a month after Beta won a big endorsement from UPS. Big Brown inked a letter of intent to buy up to 150 Alia aircraft, whose price is expected to fall between $4 million and $5 million apiece. Beta executives are hoping that an order will be forthcoming from Amazon, too, with both the giants looking for ways to make good on pledges to slash carbon emissions from their package delivery operations.

Beta aims to start delivering UPS’ first 10 aircraft in 2024 – assuming it wins safety certification for Alia by then from the Federal Aviation Administration. If not, the U.S. Air Force could end up fielding Alia first: Beta has won contracts worth $43.6 million to test out Alia for military use. In May, Alia became the first electric aircraft to win airworthiness approval from the Air Force for manned flight.

Beta says Alia’s bulbous cabin will be able to carry 600 pounds of payload, including the pilot, a maximum 250 nautical miles — at least 100 miles farther than any competitors that have prototypes in the air — or up to 1,250 pounds for 200 miles with one of the five battery packs removed. Clark expects FAA reserve requirements to restrict flights to 125 miles.

But given Alia’s high price – roughly double a similarly sized new Cessna Grand Caravan and up to five times the used planes that dominate small cargo fleets – Beta and UPS know Alia will only make economic sense if it flies a lot. That will require a radical reshaping of delivery networks away from the longtime hub and spoke pattern under which cargo planes typically make just one roundtrip per day, funneling packages from a local airport to a sorting center.

Instead, they envision Alia flying directly from one UPS warehouse to another – cutting out truck trips as well as plane flights — and eventually straight to large customers. Frequent flying will allow savings as lower operating costs kick in. Beta promises 90% savings on fuel and cheaper maintenance due to the fewer parts of electric propulsion systems — plus a fat 35% reduction if computers eventually bump pilots from the cockpit altogether.

Clark, a heavily tattooed dynamo who rises at 4 a.m. and says he can always find a late hour to work on motorcycles or his own airplanes, grew up outside Burlington obsessed with sports and flight. He was a star athlete at Essex High School, captaining the football, lacrosse and hockey teams. His wife, Katie, whom he met in 7^th grade, says when Clark was invited to parties, he’d usually beg off to go home and build model airplanes.

Clark honed his grease monkey skills helping mechanics at a local airport in return for plane rides. When he set out to build an ultralight airplane from a kit, his mother, fearing he would kill himself, built a backyard bonfire and burned the parts.

Clark finally got in the pilot’s seat when the Washington Capitals signed him during his junior year at Harvard: He used the contract bonus to take flying lessons while playing on farm teams in Richmond, Va., and Portland, Maine.

Returning to Harvard after two years, for his senior project, Clark designed a flight control system for a single-person aircraft based on a motorcycle seat and handlebars. Failing to find investors to develop the plane, Clark started a business in 2005 building power supply equipment in his mother-in-law’s garage. In 2010, he sold that company to Dynapower, a Vermont power equipment manufacturer, and became its director of engineering, helping develop systems used in Tesla’s commercial energy storage offering, Powerpack.

After a private-equity group scooped up Dynapower in 2012, Clark found himself armed with a little cash. He motorcycled up and down the East Coast trying again to sell investors on his airplane design. With no takers, he cofounded a social-networking platform in 2014 that connected startups with talent and capital, hoping to use it as a springboard for his own plans.

But it isn’t to the Internet that Beta owes its existence; it’s to the iconoclastic biotech entrepreneur Martine Rothblatt.  After becoming wealthy from founding Sirius Satellite Radio, Rothblatt started a biotech, United Therapeutics, in 1996 to develop a treatment to save her daughter from a lung ailment. The drug worked, but at some point her daughter will still need a lung transplant. That motivated Rothblatt to make an audacious effort to solve the chronic shortfall in organs for transplantation: She’s developing artificial ones.

Electric vertical takeoff and landing (eVTOL) aircraft are the perfect solution to quickly — and greenly — get the perishable organs to hospital helipads. She contracted with the helicopter company Piasecki to develop one to her specifications, but at a 2017 meeting with subcontractors, she says she was deeply impressed by Clark, whom Piasecki had hired to build the electric power systems.

“I’ve been in countless technical presentations,” says Rothblatt. “I immediately saw that this guy was like a 99th percentile expert.”For customer United Therapeutics, Beta has developed a more elaborate version of its charging station with a landing deck atop modular metal container-like rooms that can be configured as crew rest quarters, mission planning space or storage units.

Discovering Clark lived near her vacation home in Vermont, she invited him over. What was supposed to be a 30-minute coffee became an all-day hangout, with Clark driving her to Montreal for previously scheduled meetings. She decided he was the right person to build the whole aircraft. She gave him $52 million to get Beta started, and has ordered 60 aircraft and eight charging stations.

“You get to tell by spending time with somebody face to face… who will smash down a wall to achieve success and who will just give you excuses,” says Rothblatt. “Kyle was equal to the best executive that I had ever worked with in my life before he’d done anything for me.”

In just eight months, Clark’s small team built and flew Ava, a test mule for key subsystems. Starting with the fuselage of a Lancair plane, they skewered the nose and tail with tilting shafts bearing four pairs of counter-rotating propellers that earned Ava comparisons to Edward Scissorhands.

At 4,000 pounds, it was the largest electric aircraft by weight to date to achieve a vertical takeoff and landing. But along with its successes, it led Clark to conclude that tilting rotors – which many of his competitors are using — were a mistake, adding weight and complexity that threaten to make safety certification more difficult.

Alia, which he began work on in summer 2018, has separate systems for lift and cruise: a pusher propeller at the rear for forward flight, and to take off and land vertically, four propellers mounted atop two booms bisecting its wings. Those long, high wings optimize it for long-distance flight. He says it’s such an efficient glider that if power were lost at 8,000 feet it would smoothly – and safely — descend for about 10 minutes.

And the placement of its 3,300 pounds of batteries at the bottom of the aircraft, counterbalancing the wings, makes Alia inherently stable, in stark comparison to tiltrotors. The simpler design means that Alia’s core flight control program contains only 1,200 lines of code, says Clark; tiltrotors need millions of lines of software.

Observers raise two safety concerns: If it lost one of its four lift propellers, Alia would become difficult to control in vertical mode, and placing the batteries in the belly could pose a fire risk to passengers above. Clark says the passenger compartment floor will have titanium shielding and that losing a lift prop is unlikely – each has four redundant motors.

But regulatory risk is high. After all, the FAA has yet to certify even a conventional airplane with an electric propulsion system, let alone a vertical takeoff and landing one. Clark and Rothblatt’s conviction is that keeping the aircraft as simple as possible is key but it’s anyone’s guess as to how much time it will take the agency to assess Alia’s novel technology – or whether they’ll require modifications that sap its performance. Even Beta true believer Rothblatt is hedging her bets by backing the development of two simpler aircraft: a helicopter retrofitted with an electric propulsion system and a large drone from the Nasdaq-listed Chinese company EHang.

Black images of flying unicorns adorn windows at Beta’s headquarters at Burlington Airport. It’s not a joke about Beta’s status as a billion-dollar aircraft startup. The tail numbers on the two Alia prototypes are N250UT and 251UT, for United Therapeutics and Rothblatt’s stipulation of 250-mile range.

When identifying the aircraft to air traffic controllers, the last two letters should be pronounced as “Uniform Tango” by aviation convention, but to annoy her husband when handling comms during flight tests, Katie Clark took to saying “Unicorn Tango.”

Clark follows two unusual strategies in running Beta: he’s aiming for a flat structure without titles where young engineers feel free to challenge older ones – and he wants everyone to learn to fly.

He gives his 350 employees free lessons in Beta’s motley fleet of 20 airplanes and helicopters, including humdrum Cessna 172 trainers, an Extra aerobatic plane, a World War II Boeing-Stearman biplane and a 1940 Piper Cub.

Many employees have no prior aerospace experience. Getting familiar with aircraft through flying helps them better design aircraft systems, as well as fosters a love of flight that Clark says is more motivating than bonuses. Investors have questioned the expense, but Clark is standing firm. “The sheer passion of when people give a shit is worth more than anything,” he says.

Beta’s investors also would prefer if Clark didn’t insist on being Alia’s test pilot – or burn off steam by doing barrel rolls in the aerobatic plane – as would his wife. Clark says it’s who he is. And he insists that flying Alia himself – which he claims has had no hard landings or crashes – gives him direct insight into whether design tweaks are working and how customers will experience it.

“Are we going to crash a plane or a helicopter? Of course it’s going to happen,” says Clark. “It’s the reality of bringing a new technology to market. The world’s going to be a better place for what we bring, and that takes risks.”

THE POWER THEY NEED TO SUCCEED

A key problem for eVTOL aircraft is the weight of batteries, which contain 14 times less energy by weight than aviation fuel. To achieve their range and payload goals, Beta, Joby Aviation and Kitty Hawk appear to need battery packs with energy densities at the outer range of the newest technologies, while Lilium is way out in experimental territory, according to battery experts Venkat Viswanathan and Shashank Sripad of Carnegie Mellon University.

Batteries are evaluated by two key metrics: specific energy, which is the amount of energy they contain for a given weight; and specific power, a measure of how much energy the battery can discharge at once for a given weight. In a recent paper, Viswanathan and Sripad estimated the pack-level specific energy requirements for five eVTOLs assuming an empty weight fraction of 0.5

(That’s the share of the maximum takeoff weight that’s taken up by the airframe, avionics and other onboard systems). The lower the empty weight fraction, i.e. the lighter the structure, the more room there is for batteries, meaning their specific energy doesn’t need to be as high. The bars to the sides of each square show how much the specific energy requirement varies at empty weight fractions between 0.45 to 0.55.