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Firefly Aerospace becomes the latest space unicorn after $75 million raise

Firefly Aerospace becomes the latest space unicorn after $75 million raise

04 May 2021

The company prepares its first Alpha rocket for launch at Vandenberg Air Force Base in California.

Firefly Aerospace

Firefly Aerospace raised $75 million in private capital, the Texas-based space company announced on Tuesday, as it prepares for the inaugural launch of its Alpha rocket.

“This gives us runway to have multiple successful Alpha [rocket] launches, successfully execute a lot of the main milestones for the Blue Ghost [lunar] lander program,” Firefly co-founder and CEO Tom Markusic told CNBC.

The company’s latest financing was led by DADA Holdings, a private investment firm that largely holds positions in metals and mining companies. The round was joined by several other investors, including Astera Institute, which will have Jed McCaleb join as a representative on Firefly’s board of directors. McCaleb is most well known for his roles in the cryptocurrency landscape.

Markusic declined to specify what Firefly’s valuation is after this raise, only noting that it’s “just over a billion dollars” – and therefore making it the latest space company to reach unicorn status. Firefly’s fundraise was also unique in that the company itself offered $75 million in equity, while its majority investor Noosphere Ventures sold $100 million of its stake. Noosphere – based in Menlo Park, California but led by Ukrainian investor Max Polyakov – now owns less than 50% of Firefly.

“It just makes business sense to have a more diverse cap table,” Markusic said, emphasizing the addition of U.S. investors into Firefly.

Firefly also outlined its intention to raise an additional $300 million later this year, after it launches its inaugural Alpha rocket. While the $75 million finances its near-term development plans, the company wants to expand its services across the space industry. Firefly is most well known for its launch business, with the Alpha and the planned Beta, but it is also working on a lunar lander called Blue Ghost and a space utility vehicle – also known as a “space tug,” to transport satellites into unique orbits after a launch.

“From the beginning we architected the company code in a completely different way,” Markusic said. “We’re not a rocket company, we’re not a launch vehicle company. We are an end-to-end space transportation company.”

A rendering of the Genesis lunar lander.

Firefly Aerospace

The company is evaluating whether its second fundraise this year will be another private round or possibly a SPAC deal, a route other space companies have taken to raise significant amounts of capital. Markusic said Firefly will “figure that out” in the next few months, but emphasized that he wants to hit more milestones before then.

A SPAC, or special purpose acquisition company, raises capital in an initial public offering and uses the proceeds to buy a private firm and take it public.

“I think a company, before it goes public, should have established a steady revenue stream; should have proven the fundamental technology that undergirds the business plan of the company,” Markusic said.

Inaugural Alpha rocket launch

Inside Firefly’s launch control center at Vandenberg Air Force Base.

Firefly Aerospace

In the meantime, Firefly is focused on its first Alpha rocket launch, which has been delayed since late last year.

Standing at 95 feet tall, Firefly’s Alpha rocket is designed to launch as much as 1,000 kilograms of payload to low Earth orbit – at a price of $15 million per launch. This puts Firefly in the “medium-lift” category of rockets, pitting it against several other companies including Richard Branson’s Virgin Orbit, ABL Space and Relativity Space.

Markusic said that Firefly “ran into some problems with readiness of the launch site” at Vandenberg Air Force Base in California, and also had a significant delay from a supplier of the rocket’s flight termination system – a key piece required for the rocket to launch.

“Just from our side, we did not get the launch site ready as quickly as we thought we could. We kind of miscalculated on where we were in readiness and that’s on us. This is something we didn’t do well,” Markusic said.

The CEO added that Firefly hopes to launch Alpha by mid-June, but emphasized that an inaugural launch comes with “a lot of unknowns.”

“We’re going to keep working through the problems, and we will launch eventually,” Markusic said.

On the regulatory approval side, Firefly received its Federal Aviation Administration launch license a few weeks ago, which Markusic declared to be the “biggest hurdle in getting approvals” to launch.

Additionally, a Federal Communications Commission filing in November noted that Firefly’s FCC license was requested for review from the U.S. Department of Justice’s Foreign Investment Review Section, with the DOJ saying it would take a look at Firefly’s license application “for any national security and law enforcement concerns.”

Markusic “didn’t really hear much” more about that review, saying the DOJ “dropped” the review and that Firefly received its FCC license earlier this year. Notably, Firefly is waiting for a second FCC license after the company made an adjustment to the trajectory of the Alpha launch, but Markusic expects to receive approval for that one “any day now.”

“From a regulatory perspective, I think we’re in good shape,” Markusic said.

Markusic – who worked at Elon Musk’ SpaceX, Jeff Bezos’ Blue Origin and Branson’s Virgin Galactic before Firefly – sees the space industry as more cooperative than competitive.

“We’re all kind of brothers in arms, ushering in a new space revolution, and in some way we’re all on the same team – making space accessible,” Markusic said.

More broadly, he believes there is “a lot of mutual respect that goes around” given the difficulty of what companies are each trying to achieve in space.

“This is really, really hard stuff. There are a lot easier ways to make money in the world,” Markusic added. “It’s like the most difficult technical problem, and the financial problem is about the most difficult financial problem you can solve as well.”

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