At the recent virtual SmallSat Symposium two keynotes offered different perspectives on the small satellite launch services market. The first keynote was by Future Ventures partner Steve Jurvetson and the second keynote was by Chris Kemp, CEO of Astra, the small satellite launch services startup. There’s some common ground between the two, but their views on who should serve the small satellite launch services market definitely contrast.
Steve Jurvetson, venture capitalist
If you’re familiar with SpaceX then you should be familiar with Steve Jurvetson. He sits on the SpaceX board of directors and Future Ventures was an early investor in the company. To date, Future Ventures has invested in only two space startups, SpaceX and Planet Labs.
Jurvetson is unabashedly a SpaceX and rocket fan. During his keynote he spent a good half of it talking about SpaceX, in glowing terms, as you might expect from someone who’s a shareholder and board member.
However, when it comes to small satellite launch providers Jurvetson didn’t see why there were so many startups in this market space, particularly because SpaceX had proven with their Transporter-1 mission that they could offer the service at a “marginal cost of $5000 a kilogram.”
Jurvetson spent some time talking about website called the NewSpace Index which lists over a 150 small launch vehicle companies including retired vehicles, defunct projects and most which have yet to fly. For Jurvetson, the key to the index is stated price per kilogram for each launch vehicle. He went on at length on this topic. I’ll note here that the NewSpace Index is not a definitive source, it’s not updated frequently, and the data is incomplete or outdated.
“Now, you need to note on this, before we even dive in, first 154 companies on their list, and believe me, there’s some that are not listed here. That’s astounding. That’s really astounding, billions of dollars going to fundamentally the exact same market segment. The whole bunch could be said about how the venture industry does this. You know, for someone investing in the 150th, do they know they’re the 150th, it’s pretty amazing to me, I just gotta say I’ve never I’ve never seen anything like it. But to be fair, I don’t invest in you know, like, add matching networks and some other consumer internet areas that I’m sure have had the same if not more. Venture fratricide is is called, meaning overfunded. sectors, by venture capitalists are just all doing the same thing, not realizing they’ll do the same thing.”
Jurvetson isn’t wrong in that there are a lot of companies trying to enter the small satellite launch services market space. But there are factors at play here that he omitted in his speech. First off, he’s approaching this from a US venture capitalists perspective. He doesn’t seem to be taking into account the marketplace outside of the US. Not everyone will want to launch, or can launch with a US provider like SpaceX, or get on a launch mission in the right timeframe or the right orbit. Though there are now “space tugs” that operate on the SpaceX Transporter missions to boost payloads to their intended orbits.
He also failed to mention that SpaceX had eschewed the small satellite launch market until recently. Many won’t remember that SpaceX dropped the Falcon 1, and the proposed Falcon 5, for the Falcon 9 to focus on larger payloads. In dropping the small satellite payload market, SpaceX opened the door to new competitors focused on that market.
I was disappointed in Jurvetson’s speech. Considering the audience, he intimated that those looking to launch small payloads don’t really need to look beyond SpaceX.
If SpaceX has taught anything to young entrepreneurs, it is that you can innovate and take on established companies. What’s to say someone else can’t do small satellite launch cheaper, or better.
Which brings us to Astra, just one of the new entrants trying to grab market share.
Chris Kemp, Astra
Astra does not 3D print, does not use composites, is going public via a Special Purpose Acquisition Company (SPAC), recently raised $500 million investment at a US$2.1 billion valuation, and is going head-to-head with Rocket Lab, Virgin Orbit and others in trying to secure a portion of the small satellite launch market.
Astra’s success in fundraising is in part due to CEO Chris Kemp’s background. His success started as the Chief Architect of Classmates.com. That led to another startup Escapia and then to NASA. At NASA he was a Director of Business Development, then Chief Information Officer and finally Chief Technology Officer. When he left NASA he co-founded OpenStack and Nebula and became an advisor with Planet Labs. I met Kemp on several occasions early in his career. He was meticulous in building his network of contacts. And that is in part what has led to his current success with Astra. The company has had one orbital launch which was partially successful.
Kemp is from the Seattle area. His first ventures where in Seattle before he moved to San Francisco Bay area. The company leading his SPAC is Holicity Inc. which is owned by telecommunication billionaire Craig McCaw. If you live in the Pacific Northwest, you know who McCaw is. Holicity is investing US$300 million while BlackRock is investing US$200 million.
During his “fireside chat” at the virtual SmallSat Symposium, Kemp said in discussing what the SPAC listing means to the company, “I think this this transaction fully funds our business plan between now and 2025, to scale our production and launch rate to to daily space delivery, which was which was really our objective on day one.”
It’s interesting that Astra currently plans on trying to scale to the point of having a “daily space delivery.” That audacious thinking. I’m not sure how realistic it is. SpaceX said the same thing and that has yet to materialize.
“And it also allows us to fund the development of a new business involving highly integrated spacecraft. And that’s really exciting because many of our customers spend many years and, and fly on many launches before they figure out some of the basic fundamental infrastructure that they need just to host their payload, which is usually a radio or a camera, something that is solving some unique problem in low Earth orbit. And so I’m really excited to be able to invest in making that a lot easier. And helping our customers go from a concept to a constellation and maybe months instead of many years. And I think that really opens up and accelerates the opportunity for so many companies to to build things in low Earth orbit, it reminds me I’m a kind of computer software guy, and back in the 90s, used to build data centres and have to operate large numbers of servers to build a website, and you just don’t have to do that anymore. That’s undifferentiated, heavy lifting, so to speak. And you just use a cloud. And to some degree, this, this really resonates with me, because the more we can help our customers get up into space and operational with with whatever unique sensor or radio that they’re using, or whatever else they’re trying to put up there, the faster they’re going to be able to serve their customers.”
This sounds somewhat like what Rocket Lab is trying to do with their Photon small satellite platform. Customers just need to bring their payloads and integrate them on a platform and get the satellite launched.
One of the things that struck me in listening to Kemp is the very different approach the company is taking in building its rocket. Unlike well funded Relativity Space which is 3D printing its rocket, Astra’s approach is to keep it simple, with no exotic composites and no 3D printing. For them its about traditional manufacturing techniques including building a high-speed manufacturing process that just churns out rockets in quantity. It will be interesting to see how these two companies fare going forward with their respective approaches.
In going back to Jurvetson’s speech, I’ll agree that most of the startups will fail. In failing they might join existing companies, or merge with other startups. There’s a small satellite launch market that needs to be served and SpaceX can’t meet that demand on its own. Other players will emerge beyond potentially Rocket Lab, Astra and Relativity Space, including players in, and designed, for foreign markets.