A German flying taxi firm was Tuesday saved from collapse after investors swooped in to take it over, in a case that has fired debate about support for the country’s startup scene.

Lilium had already filed for bankruptcy in October, and was expected to fold entirely this week unless it could secure new sources of funding.

But the startup, which has been developing small electric-powered jets that can take off and land vertically, announced a “major breakthrough.”

Mobile Uplift Corporation, a company set up by a consortium of European and North American investors, had signed a deal to buy the assets of the crisis-hit German company, Lilium said.

Lilium, which is headquartered in Munich, did not disclose the price of the deal or further details about the investors.

The agreement is expected to be finalised at the start of January, which will “allow us to restart our business,” Lilium CEO Klaus Roewe said.

Founded in 2015, Lilium had attracted substantial interest, with 100 firm orders for its jets to date and hundreds more pre-orders.

Among future buyers was Saudi Arabia’s flag carrier Saudia, which this year signed a deal to buy 50 of the firm’s aircraft with options to purchase 50 more.

The firm’s flying taxis should be able to carry four to six passengers up to 175 kilometres (110 miles) at a speed of 250 kilometres an hour.

But it has yet to conduct a manned test flight. The first trial is expected next year, followed by the first deliveries to customers in 2026.

Its investors, mostly from the United States and China, provided some $1.5 billion (1.4 billion euros) in financing but Lilium burnt through huge amounts of money in development costs.

It was forced to turn to the state for emergency funding but the German parliament’s budget committee refused in October to approve a loan guarantee to the tune of 50 million euros.

It then filed for bankruptcy, and launched a hunt for new investors.

Lilium employed more than 1,000 people, most of whom were made redundant ahead of this week’s deadline to get new investors on board. But many will reportedly return now a rescue deal has been agreed.

Another Germany flying taxi startup, Volocopter, has also been facing problems, including when it comes to financing.