Technology & Innovation
Joby Aviation Raises $1 Billion for FAA Certification and 2026 Launch
Joby Aviation initiates $1 billion offering of convertible notes and stock to fund FAA certification, manufacturing, and 2026 commercial launch including Dubai.
Joby Aviation (NYSE: JOBY), a leader in the development of electric vertical take-off and landing (eVTOL) aircraft, announced on January 28, 2026, that it has launched a concurrent offering of convertible senior notes and common stock. The company aims to raise approximately $1 billion in aggregate gross proceeds to fund its final push toward Federal Aviation Administration (FAA) certification and the launch of commercial passenger operations.
According to the company’s announcement, the capital raise is structured as two separate but concurrent public offerings: the issuance of Convertible Senior Notes due 2032 and a direct sale of Common Stock. The move comes as Joby prepares for a targeted commercial entry in 2026, including operations in Dubai and other key markets.
Following the announcement, market data indicates that shares of Joby Aviation fell approximately 8–11% in after-hours trading on January 28. This reaction reflects typical investor sentiment regarding share dilution, despite the strategic necessity of the capital injection.
The proposed offering is complex, involving both debt and equity instruments designed to maximize capital while attempting to manage dilution for existing shareholders. The offerings are being managed by underwriters including Morgan Stanley and Allen & Company LLC.
Joby is offering debt securities in the form of Convertible Senior Notes that mature in 2032. These notes offer investors the ability to convert their debt into stock at a later date, providing potential upside if the company’s value increases. Concurrently, the company is selling shares of common stock directly to the public.
To facilitate the transaction, the deal includes specific financial mechanisms aimed at hedging risk. As detailed in the offering context, a “Delta Offering” allows the banking partners to borrow and sell Joby shares. This activity facilitates hedging for investors buying the convertible notes but creates immediate selling pressure on the stock.
Additionally, Joby intends to use a portion of the proceeds to fund “capped call transactions.” These serve as an insurance policy against dilution. If Joby’s stock price rises significantly in the future, these capped calls reduce the number of new shares the company must issue to note holders upon conversion, thereby protecting the ownership percentage of current shareholders. In its official statement, Joby Aviation outlined specific uses for the $1 billion war chest. The primary focus is bridging the gap between the capital-intensive development phase and revenue-generating commercial operations.
“Joby intends to use the net proceeds from the offerings… to fund its certification and manufacturing efforts, prepare for commercial operations, and for general corporate purposes.”
, Joby Aviation Press Release
Key allocation areas include:
While a $1 billion raise is substantial, it aligns with the immense costs associated with aerospace development. As of the third quarter of 2025, Joby reported a net loss of approximately $401 million for the quarter alone. Although the company projected liquidity of roughly $1.4 billion by the end of 2025, bolstered by a previous raise in October, the burn rate required to achieve mass manufacturing and certification remains high.
We assess that this capital raise is a defensive measure to ensure the company does not face a liquidity crunch right as it enters its most critical operational phase. By securing funds now, Joby avoids the risk of needing to raise capital later under potentially less favorable market conditions.
The capital raise is supported by a backdrop of strong strategic partnerships. Toyota Motor Corporation remains Joby’s largest external shareholder and a critical industrial partner. As of May 2025, Toyota had committed a total of $894 million to Joby, assisting directly with manufacturing processes and quality control.
Furthermore, Joby’s acquisition of Blade Air Mobility’s urban air mobility division in late 2025 has provided the company with immediate revenue streams and access to passenger terminals in key markets like New York and Europe. Despite these revenue sources, the company remains in a pre-profit growth phase, making external capital vital for survival.
Why did Joby’s stock price drop after the announcement? What is a Convertible Senior Note? When will Joby Aviation begin commercial flights?
Joby Aviation Initiates $1 Billion Capital Raise to Secure Commercial Launch Runway
Breakdown of the Financial Offerings
Convertible Senior Notes and Common Stock
The “Delta Offering” and Capped Calls
Strategic Rationale and Use of Proceeds
AirPro News Analysis: The Cost of Certification
Partnerships and Market Position
Frequently Asked Questions
The stock dropped 8–11% in after-hours trading due to “dilution risk.” When a company issues new stock, the value of the company is spread across more shares, which can lower the price of individual existing shares. Additionally, the “Delta Offering” creates immediate selling pressure from hedging activities.
It is a type of debt security that pays interest (or has a zero coupon) and can be converted into a predetermined number of common stock shares or cash. It allows companies to borrow money at lower interest rates than traditional loans in exchange for giving lenders potential equity upside.
Joby is targeting 2026 for its initial commercial passenger operations, with Dubai expected to be one of the first launch markets.
Sources
Photo Credit: Joby Aviation