JetSmarter, the once high-flying private aircraft-booking app backed by Jay-Z and the Saudi royal family, is being cleared for emergency landing, according to insiders.
Valued at $1.6 billion two years ago, the so-called Uber of the skies is said to be in “rescue talks” that could result in a sale for as little as $20 million, two industry insiders told The Post.
Both insiders identified roll-up artist Vista Global as the likely acquirer. But if talks between the two parties fail, and JetSmarter fails to secure additional financing, the sources said it could be forced into bankruptcy.
“People in the industry are already calling it the Fyre Festival of aviation,” one insider said.
It’s hard to imagine a bigger comedown for the 6-year-old private jet service, which after a third round of investing in December 2016 emerged a fully formed “unicorn.”
That meant its valuation exceeded $1 billion — enough to make 30-year-old Sergey Petrossov, the company’s Russian-born and Florida-raised founder, the flight-sharing economy’s fastest-rising star.
Since then, however, Petrossov’s business model has done nothing but burn cash.
In a meticulously reported story last month, CNBC noted that JetSmarter members usually paid $50,000 a year for their all-you-can-fly private jet privileges.
Then it did the math: “A G4 typically costs more than $6,000 per hour to operate, so a one-way trip from New York to Los Angeles would typically cost more than $30,000.”
The numbers suggest members could break even on their investment before completing a coast-to-coast round trip. But they also suggest members could put JetSmarter in the red just as quickly.
The economics were such that CNBC, citing former employees, said JetSmarter’s 10,000 or so members were costing the Fort Lauderdale, Fla., company up to $5 million a month within four years of its launch.
For fresh capital, JetSmarter turned to the private equity firm Clearlake Capital in 2017.
Although Clearlake did not respond to The Post, CNBC estimated the firm and a banking partner invested about $75 million for a third of JetSmarter’s equity, slashing the valuation by more than 80 percent.
Yet the hemorrhaging continued, causing JetSmarter to revise its terms last June.
The revision triggered a flurry of lawsuits. The most recent, filed in Pennsylvania federal court by Florence Zabokritsky, contains language common to all of them: “JetSmarter reneged on its promises by reducing and/or terminating the services it promised to provide and demanding additional substantial payments.”
JetSmarter, which doesn’t own planes, has also alienated fleet operators. The insiders said XOJET, owned by Dubai-based Vista Global, is about the only operator still willing to serve JetSmarter.
A JetSmarter spokesperson said the company does not comment on “rumors and speculation.” Jay-Z could not be reached, although a source familiar with his investments called his stake “modest and passive.”
Vista Global acknowledged contact “by many companies regarding opportunities in multiple markets and across the value chain, but we can’t comment on rumors or speculations.”