Joby Aviation has reached tentative deals with investors and Saudi conglomerate Abdul Latif Jameel (ALJ), distributing up to 200 aircraft in the coming billions of dollars.
If confirmed, the partnership can provide Joby with a quick path to monetizing Saudi Arabia’s electrical takeoff and landing vehicles.
“The question people asked is, how do you plan to monetize and how soon will it happen?” Paul Sciarra, executive chairman of Joby’s Board, best known for co-founding Pinterest, told TechCrunch. “And I think what this shows is that there is a way to scale at a lower cost by thinking about distributor partners in a given region, with direct sales.
The companies signed a memorandum on Tuesday to explore distribution agreements. Also, while the MOU is not a sealed transaction that has been signed accurately, it says that contract-savvy sources will be able to share more specific details later this year.
This agreement is one of the first instances of an EVTOL startup that will land aircraft distributor partners. Joby also owns and operates its own aircraft in the US and other markets and plans to partner with airlines and other airlines in countries such as Japan.
Paul Sciarra, executive chairman of Joby’s board and co-founder of Pinterest, said ALJ is an ideal partner for several reasons. First, its relationship with Toyota has just shut down its first $250 million tranche of its total $500 million investment in Joby, but it’s running deep. ALJ became the exclusive distributor of Toyota in Saudi Arabia in 1955, becoming one of the world’s largest independent Toyota and Lexus distributors. Alj also participated in Joby’s 2020 Toyota-led Series C funding round.
According to Sciarra, Alj “has a lot of infrastructure on the ground for not only the sales process but also for support, pilot training and maintenance.”
“It’s all important to make sure that sales are not just being cut back, but actually making sure they’re successful in a long arc,” Sciarra told TechCrunch.
He said that as an 80-year-old network of diversified companies, ALJ is approaching many potential customers, including the Saudi government and remediation and tourism projects such as the Red Sea Project and The Alula Project.
Despite its promising partnership in Saudi Arabia, Joby’s to-market strategy is to start in Dubai next year by following the US market.
“What this shows is how to deepen the funnel beyond some of the first market,” Siarra said. “And this kind of structure will help us find the right local partners to help us with sales and support will be a way to reach an area where we may not be the first on our list, but we can monetize them more quickly.”
Joby’s deal with AFJ is in an unprecedented level of cooperation between the US government and Saudi Arabia in the areas of AI, technology infrastructure and energy. Last month, Saudi Arabian company Datavolt agreed to invest $20 billion in AI data centers and energy infrastructure in the United States, and American tech giants such as Google, Oracle, Salesforce, AMD and Uber pledged $80 billion to transformative technologies in both countries, according to the White House.