Firefly Aerospace is taking its second shot at getting into orbit. Their second Firefly Alpha launch attempt, named “To the Black,” is scheduled for launch on July 17th. And while launch attempts are always high-stakes, the stakes for “To The Black” couldn’t be higher.
Firefly’s future may depend on its success.
From “Firefly Space Systems” to “Firefly Aerospace”
Tom Markusic, Virgin Galactic’s former VP of propulsion, joined P.J. King and Michael Blum in starting “Firefly Space Systems” in January of 2014. Likely named after Joss Whedon’s cult-classic space western, development at Firefly seemed to be moving quickly. They revealed their “Firefly Alpha” rocket’s design a few months later in July of 2014, and performed their first hot fire test a little more than a year later in September 2015.
Controversy between Markusic and Virgin over intellectual property led to a major investor backing out in 2016, however. Firefly Space Systems was unable to find new investors, and closed its doors in December of 2016.
Firefly’s assets were bought by Noosphere Ventures in March of 2017, however, and the company was recreated as Firefly Aerospace. Noosphere’s owner, Ukrainian tech entrepreneur Max Polyakov, committed to fully funding Firefly through at least its first two launches.
After the rescue, Firefly began to attract more official support. NASA named them as one of the nine companies selected for the Commercial Lunar Payload Services (CLPS) contract in 2018. In 2019, they announced that they would be building a manufacturing and launch facility at Cape Canaveral, and received a US$93.3m award in 2021 to deliver technology for the Artemis mission, which eventually became Firefly’s “Blue Ghost” lunar lander. Firefly even announced more launchers. The Firefly Beta is a larger version of the Alpha, and the Firefly Gamma is designed as a reusable rocket plane.
Meanwhile the development of Firefly Alpha continued. The modern Alpha features a 3D printed carbon fiber airframe (much like Rocket Lab’s Electron and Neutron rockets) along with four “Reaver 1” first stage engines and one “Lightning 1” second stage engine. Both engines use LOX/RP-1 propellant, but the Reaver is notable for being a “tap off” engine that circulates a small amount of exhaust gas back into the engine to run the fuel pump.
Preparations continued, and everything seemed set for their first test launch on September 10, 2021. It had a payload that included a number of small satellites and “Firefly Capsule 1,” which had “various nontechnical items…such as photos, artwork, and children’s books.”
The first Alpha launch, however, was unsuccessful.
Alpha launch failure
According to Firefly’s release, there was “an electrical connector issue” that caused the shutdown of one of the Reaver engines. In a series of tweets, Firefly also said that the electrical issue meant that “the propellant main valves on the engine simply closed and thrust terminated.” As Scott Manley explained in his video on the launch, the design of the Alpha meant that the other engines were not able to compensate for the destabilizing effect. The vehicle tumbled out of control, and Firefly decided to scrub.
Still, the congratulations they received from companies like Rocket Lab and Blue Origin about “getting good data” is a reminder that early problems are common with launchers. SpaceX’s Starship tests have featured a variety of truly spectacular explosions and crashes. It happens.
Firefly is confident that their technical issues are solved. In an interview with Ars Technica, Markusic said that “pins inside the electrical conductor had been subjected to higher than anticipated vibrations and sheared off,” and that they hadn’t caught it because “this was a unique vibrational environment, this is probably a phenomenon we could only see in flight.”
He told Ars that the newer Reaver engines don’t vibrate as much, which should resolve the issue. He said that Firefly has also “taken the precaution of moving the electrical conductor higher on the vehicle, where there are fewer vibrations, and also given it a dedicated mounting bracket to further isolate it.”
Markusic said he was confident that “that problem is not going to happen again,” and went to the extent of creating a flashy promotional video (below) about how they’d “learned a lot from the first flight, and have fixed the minor problems.”
Leadership changes
These technological improvements have been overshadowed, however, by further leadership and ownership issues at Firefly Aerospace.
Polyakov’s ownership stake in Firefly had been a consistent issue since the buyout. US government officials, particularly in the US Air Force and the Committee on Foreign Investment, were reluctant to have a Ukrainian businessman have an ownership stake in a US-based launch company. With the invasion of Ukraine in February of 2022, the pressure mounted, preventing Firefly from going ahead with its second launch attempt for months.
Polyakov eventually yielded, and Noosphere gave up its stake. Noosphere’s stake was bought out by private equity firm AE Industrial Partners (AEI), who then led a $75m Series B round and became the majority stakeholders of Firefly. AEI’s Kirk Konert said that Firefly is “entering a new phase of growth, highlighted by the upcoming second launch of Alpha.”
They eventually made it clear that this “new phase” was going to include a change in leadership, removing Markusic as CEO in mid-June and replacing him with AEI partner Peter Schumacher as interim CEO. While the reason for the ouster remains unclear, AEI’s release said that “AEI’s portfolio companies have a history of serving as strategic partners to the top national security agencies, including the Department of Defense.” This strongly suggests that AEI wants to refocus Firefly on the American governmental launch market, and will recruit leadership that is familiar with (and to) that market. Markusic remains at Firefly as Chief Technical Advisor.
Market headwinds and opportunities
Market changes have meant that the stakes for Firefly’s upcoming Alpha launch couldn’t be higher. Markusic and Firefly’s confidence in the engine changes will be put to the test.
The dramatic downturn of stock markets, and growing recession expectations, have had a devastating impact on technology firms. Space stocks were already down even before the downturn, however, especially those firms that went public through a SPAC takeover. While Firefly is privately held, these conditions could make raising additional capital extremely challenging unless they can show results in the upcoming launch.
They also face serious competition in the small-to-midsize launch market. Between SpaceX’s long track record of successful Falcon 9 launches, Rocket Lab’s recent success in sending the CAPSTONE satellite to the Moon using small Electron and Photon vehicles, and increasing potential competition from upcoming launch companies like Relativity Space, Blue Origin, Virgin Orbit and Canada’s own Reaction Dynamics, a track record of failure in a recessionary market could mean that potential investors may decide to take their money elsewhere.
In this context, though, AEI’s move makes more sense. As Payload CEO Mo Islam laid out in a recent YouTube interview, the “race for space dominance” is increasing for the same reason that Polyakov was pressured into selling his stake: the Russia-Ukraine conflict. Launch companies may see a downturn in demand for private-sector launches, but will almost certainly see a big upswing in government launches. Firefly is now well-positioned to take advantage of that.
Even outside of the government space, the loss of demand may also be dwarfed by a loss of supply. Russia is no longer launching Western payloads. So while there are a lot of launch companies trying to get rockets into space, the ones that can actually get there could see an avalanche of demand.
High Alpha launch stakes
That’s why this launch has such high stakes. If another launch fails, things could become dire. Even if these are solvable problems, investors’ declining appetite for risky ventures could make it difficult for Firefly to raise more funds for further testing and launch attempts. The company’s wrenching changes in ownership and leadership will only make fundraising that much more difficult. AEI might lose faith.
If it’s successful, though, Firefly could be poised for massive growth. Those changes in ownership and leadership may have let AEI position Firefly to reap the benefits of a rapidly growing US governmental launch market. Paired with the ongoing launch supply crunch, this could keep Firefly as busy as they can possibly handle. Even with the growing competition, there will be demand to spare.
This next launch will be a very, very important day. Both for Firefly, and possibly for the whole launch industry.