Boeing spins off venture capital arm to trim costs

Plane maker formed HorizonX in 2017 to invest in early-stage companies or those with transformative aerospace technologies

Boeing retreated from several ambitious forays launched late last decade before the 737 Max grounding and coronavirus pandemic drained more than $30 billion in cash. Photo: AFP

Boeing is spinning off its HorizonX Ventures arm, along with stakes in about 40 portfolio companies, as the plane maker shrinks its infrastructure for a post-Covid-19 world.

The Chicago-based plane maker dissolved an internal investing unit, known as NeXt, last autumn as it pared spending and retreated from several ambitious forays launched late last decade before the 737 Max grounding and coronavirus pandemic drained more than $30 billion in cash.

The company had formed HorizonX in 2017, back when it was flush, to invest in early-stage companies or those with transformative aerospace technologies. The portfolio holdings include Virgin Galactic, Sir Richard Branson’s space company.

Boeing is also transferring the team overseeing its investments to a new venture fund launched by AE Industrial Partners, a private equity firm that specialises in aerospace and defence deals, the companies said.

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The aviation titan will remain an anchor investor for the fund, known as AEI HorizonX, along with a follow-up fund planned for next year.

The US manufacturer intends to continue to selectively invest in companies that fit with its strategic imperatives. Boeing recently formed a partnership to bring large-scale sustainable aviation fuel to the US.

It intends to hang on to two high-profile start-ups funded by the former VC arm, including Wisk, the urban mobility venture it founded with Larry Page-backed Kitty Hawk, and SkyGrid, a venture with SparkCognition aimed at helping to manage the coming wave of unmanned vehicles.

Updated: August 6th 2021, 11:22 AM