Wheels Up, a private aviation start-up, completed a $128 million round of funding that includes a valuation of the company, which is slated to come in at $1.1 billion. This latest funding round could mark an increased interest by investors looking for startup and aviation opportunities in the capital markets.
While the trade wars are going on, the private aviation industry is waging a war on its own. Per a report by CNBC, the Wheels Up funding “marks an escalation in the air war between private aviation players to become leaders in a new era of consolidation and technological change that is remaking the industry. New digital-booking apps and scheduling programs have made booking a private plane cheaper and easier than ever. Industry giants like VistaJet, Directional Aviation and now Wheels Up are vying to become the dominant players and attract a broader customer base of affluent flyers.”
Often times, a startup is as good as its leadership and Wheels Up founder and CEO Kenny Dichter has ambitious plans ahead.
“Three years from now, we want to be the Airbnb, the Open Table, the Hotel Tonight of the private aviation space,” Dichter said.
Airline and IPO ETF Plays
Exchange-traded fund (ETF) investors who want to get a piece of the airline industry can look to funds like the US Global Jets ETF (NYSEArca: JETS). JETS seeks to track the performance of the U.S. Global Jets Index, which is composed of the exchange-listed common stock (or depository receipts) of U.S. and international passenger airlines, aircraft manufacturers, airports, and terminal services companies across the globe. The fund is up 7.45 percent year-to-date.
For investors who want a piece of the IPO action, but don’t necessarily want to assume all the risk associated with investing in a single stock like Uber or Lyft can look to the Renaissance IPO ETF (NYSEArca: IPO). IPO seeks to replicate the price and yield performance of the Renaissance IPO Index, which is a portfolio of companies that have recently completed an initial public offering (“IPO”) and are listed on a U.S. exchange.
For investors seeking opportunities overseas, the Renaissance International IPO ETF (NYSEArca: IPOS) adds an international spin to the IPO market. IPOS tracks the rules-based Renaissance International IPO Index, which adds sizeable new companies on a fast-entry basis with the rest upon scheduled quarterly reviews. Current IPOS holdings include SoftBank Corp, Xiaomi and China Tower Corp.
For more market trends, visit ETF Trends.