Why did long time investment banker Sasha Jacob, with no experience in the space sector, choose to invest in infrastructure startup Maritime Launch Services? The answer in part lies in what he learned as “the first investment banker in Canada in renewable energy.”
I recently had the opportunity to talk in some detail with Jacob about his involvement in Maritime Launch Services (MLS). It’s a relationship he’s been working on for close to three years.
Sasha Jacob is the Chief Executive Officer of Jacob Capital Management Inc (JCM). He’s also a space fan and as a youngster attended space camp in Huntsville, Alabama at a time where few Canadians did so and going was a process that included “background checks.”
He was “completely fascinated” with space because of the stories his great uncle Josef F Blumrich recounted to him. Blumrich was an engineer at NASA’s Marshall Space Flight Center where he worked on the Saturn V and was Chief of the Systems Layout Branch until he retired in 1974.
So Jacob’s always had the space bug. And now, with the space economy opening up and investors seeing opportunity, he decided it was time to get involved.
JCM is a merchant bank that has focuses on renewable power and infrastructure. According to the company over the course of its 14 year history they’ve completed 100 transactions that total over $10 billion. The company started its securities business in 2007 until 2015 when it switched to being exclusively a principal investor. Personally, Jacob made his first investment in renewable energy in 2001.
Since its inception JCM has looked for opportunities in emerging sectors. By looking at at new sectors JCM has found early investments others weren’t prepared to make. That’s how they got started in the renewable energy sector, backing technology plays like wind farms.
Jacob also states that JCM tries “to find projects, again, characteristically usually heavily regulated industries going through changes, or earliest stages of new regulation.” Well that certainly fits the launch industry in Canada. Canada currently doesn’t have launch capability or any launch facilities. It did in the past, but only for suborbital launches.
Of course, MLS is not a launch company, but it wants multiple launch partners for its spaceport. There are also several companies interested in using a spaceport based in Canada. You can read about that in our ongoing feature the Canadian Spaceport Report. Also of note, regulatory reforms are being formulated within government so that Canada can become a launching state.
So when a Vancouver colleague referred MLS to JCM, the company did its research and concluded there was an opportunity. As with other deals over the years in emerging sectors, it isn’t without risk, but it’s calculated risk. Jacob says “so it’s riskier, takes a lot more work to convince investors to come in, because it’s the early stage of a sector. But the reward can be tremendously, you know, much, much higher.”
Jacob has a strategy to manage the risk and stages of finance needed. As a principal investor, JCM invests their own capital but “not huge amounts of capital, but where we come in, and then well, you know, we’ll come in with with a bit and then bring others in, as it evolves.”
So, as an example, he stated they came in when MLS was doing its environmental assessment (EA). He knew from a project financing stage what they needed. After the EA was approved they went out and raised what they needed next. So in May 2021 they announced they had secured $10.5 million from Power One Capital Markets Limited and Primary Capital Inc. Both those companies had done business with JCM and were well known to Jacob.
Now as they moved forward and almost have the final approved EA conditions behind them, they’re going to get publicly listed. As to which Canadian exchange they’ll get listed on, that something that is expected to be announced later today at their press event at the Halifax International Security Forum. Steve Matier, MLS CEO told SpaceQ he hopes the listing is completed by the end of the year. Jacob said they’re also considering cross-listing on other exchanges later on.
With respect to the listing, which will be a reverse takeover (RTO), Jacob says investors are wanting to get in pre-RTO. “So we’re gonna do a little bit more immediately pre-RTO. So pre-listing, we’re actually gonna do more now, there’s just been a lot of interest generated, I think.”
We’ll have more insights from Jacob into the future of MLS next week in part 2.
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