Members-Only Airline Surf Air Raises Series A From Anthem, NEA & Others (Including Jared Leto)
posted 17 hours ago
Surf Air, a new membership-based air service providing short jaunts between California hot spots like Palo Alto, Monterey, Santa Barbara and L.A., has just closed its Series A. And look who invested: Jared Leto, noted actor/musician/entrepreneur. Leto has already launched three businesses – The Hive, The One and Only Golden Tickets, and Vyrt – so he’s no stranger to the startup scene at this point. But his investment in this potentially disruptive new airline should turn some heads. (Actor/investor is the new actor/director, apparently.)
The round was led by Anthem Venture Partners, and saw participation from NEA, TriplePoint Capital, Siemer Ventures, Baroda Ventures, Gilad and Eytan Elbaz, Rick Caruso, Jeffrey Stibeland early Uber investor Mike Walsh.
Surf Air also has angel funding from Paige Craig, Aviv Grill and Bill Woodward. The company is not officially disclosing the size of the round, but co-founder Wade Eyerly says it’s less than the $14 million reported recently. He says they don’t want to “disappoint anybody” by revealing the actual number.
The startup is the first non-tech company to emerge from MuckerLab, the L.A.-based incubator which celebrated its Demo Day back in April. Surf Air is targeting frequent business and leisure travelers by offering them luxurious private air travel on a Pilatus PC-12NG as an alternative to having to make an hours-long drive. Members don’t pay per flight, but get “all-you-can-fly” benefits for $1,000 per month. At launch, a fixed schedule will have 3 planes making 10 or more flights per day at 72 to 84 minutes apiece. (More details are in the FAQ here).
Says Wade, there are 29 over-burdened airports in the U.S., 480 screened by the TSA, but over 19,000 places to land a plane. The infrastructure is already there, it’s just not being used. And currently, the TSA doesn’t typically screen aircraft of this size – although they could if they chose to, of course. Surf Air hopes to fly (ha!) under TSA’s radar.
Wade, who co-founded Surf Air with his brother David, has an interesting background. He previously worked in the intelligence business, including time spent with the National Security Agency, four years as an intelligence officer with the Department of Defense, and time spent on two Presidential campaigns, including work as a Press Advance Representative for former VP of the U.S. Dick Cheney. He also served in Iraq from 2009 to 2010, where he built quantitative models to predict conflict, and received the Secretary of Defense’s medal for the Global War on Terror and the Civilian Joint Service Commendation for his work there. It’s an impressive resume. But how did that lead to a desire to create a new type of airline?
For starters, his work made him familiar with air travel of all sorts, from commercial air to private jets. But it was his brother David for whom flying was a first love. David studied to be a commercial pilot and later ran Frontier Airlines’ Dallas-Fort Worth operations. He was the one who suggested that the two should buy a plane, and start an airline. (Yes, just like that. No big deal, right?). But Wade says that his background actually prepared him for the challenge. “I don’t know if there’s a better experience for a first-time entrepreneur to have, than to have worked in the intelligence community,” he says, “because you spend your time making impossible things happen with very limited resources.”
“Every day there’s some impossible reason why this doesn’t work,” Wade adds, “and you find a way over it, under it, around it and make it happen. And the next day, you solve the next problem.”
Among the impossibilities so far? Figuring out pricing, finding airports, finding a credit card processor (those that handle airlines have to deal with the highest rate of chargebacks in the industry – so they’re few and far between), finding a company to handle benefits (pilots have to get checked out by doctors more often, so again, not all insurers want to handle them), and getting FAA and Department of Transportation approvals (Surf Air is still waiting on those last two, expected this summer). Plus, there’s the small matter of…oh, you know….getting planes.
“How do you lease an aircraft when you’re an early stage startup?” asks Wade. (Hint: you get funded.)
The plan with the Series A round is to prove the model works, but there are 25 markets in the U.S. that Surf Air has identified as future targets. The goal is to have 6 planes per market, reaching 150 planes in the air within the next 5 to 7 years. ”This is a jobs engine,” Wade says of Surf Air’s potential in hiring – for every 2 planes, the company hires about 30 people. At launch, they’ll have around 45 people. They plan to have 100 people by year-end. In five years, they’ll have close to 2,500, if all goes well.
One problem they’re not having? Finding pilots. The company has seen hundreds of applications, including many from former military, hungry for a job that allows them to come home to their family at night. Wade says he’s “genuinely proud” that Surf Air is able to hire former military and those who have dedicated their lives to serving the country (including their Director of Training, who used to fly Airforce One).
The company is accepting sign-ups now, but is not charging customers until their FAA and DoT approvals come through. Interested frequent fliers can join the waitlist here.