Field of View (FOV) - September 2023

Approach Venture’s Field of View (or “FOV”) is a monthly newsletter providing space industry participants with key insights, trends, updates and analysis to stay informed. Field of View is produced alongside space industry experts, founders, startup operators as well as commercial and government decision makers.

Approach Venture was formed to enable founding teams building the future of frontier technology to achieve their full potential. Today, Approach supports space companies ranging from stealth to publicly-traded as well as investors looking to participate in their growth potential. Connect with Approach to learn more.

Emerging Trends

As access to space increases and launch costs decrease, space companies are entering the market with missions and product roadmaps catered towards their visions of the ideal buildout of in-space infrastructure. Below contains this month’s emerging trends to keep an eye on as the space economy evolves.

Sweeping the Stars: The Rise of Space Debris Cleanup
Following the FCC’s '5-Year Rule' for spacecraft deorbit established in 2022, DISH Network became the first company to be penalized by an FCC deorbit fine after improperly executing end-of-life disposal for their EchoStar-7 geostationary satellite. DISH failed to achieve the intended disposal orbit of EchoStar-7, adding spacecraft debris to the already congested GEO orbital real estate, and resulting in a $150,000 civil penalty from the FCC.

This fine, while seemingly trivial for an established satellite operator, demonstrates the FCC and overall federal commitment to actively promoting sustainable space access and orbital debris stewardship. NASA and DoD have additionally demonstrated commitment to debris remediation through multiple recent solicitations and awards for funding deorbit and space debris remediation technologies. As solutions advance for orbital transfer vehicles, onboard spacecraft propulsion, and other novel debris removal solutions, the question remains, how will we continue to keep space clean?

Common Interfaces.
On Earth, if your car needs to be refueled (country agnostic), you can go to a gas station and fill up the tank. Regardless of what type of car you drive that takes fuel (regular, mid-grade, premium, etc.), you can go to any gas station and fill up your tank so you’re able to continue your trip or plan for future trips. Notice, you don’t have to go to a specific gas station based on the type of car you have because they all have the same interface that allows you to transfer fuel from the pump through the nozzle and into the car’s gas tank.

Approach has visibility to many new space (and legacy) companies who are in the process of proposing / creating their own interfaces for refueling, charging and upgrading their spacecraft since no common interface exists. Some refueling-focused businesses have attempted to standardize their internally produced interface across the industry but are only offering the passive interface which means companies cannot refuel themselves or others. As on-orbit servicing capabilities become commonplace, we believe common interfaces will follow soon thereafter which will also enable multi-country operations.

Stealth Spotlight 🔦

Headquartered in DC, Stealth Company is working on a novel approach to space-based solar power for Earth, delivering baseload power 24/7 without seasonality or the need for batteries. Their system is radically different from other designs and requires no orbital assembly. They closed a Seed round led by a top frontier technology VC with participation from a leading climate-focused VC in Q3 2022. The team is now raising a Seed+ to accelerate growth and reduce technical risk prior to a Series A come Q1 2025.

Potential investors, Connect with Approach to learn more and meet the founders.

Raise Roundup

Monthly overviews of space investment activity help founders, investors, industry decision makers and space enthusiasts stay informed. Below contains data and insights surrounding 2023 YTD (year-to-date) Space Technology Investments with commentary around the current month.

Raise data is as of September 30, 2023 and is inclusive of global Private Equity and Venture Capital activity in space technology.

2023 Total Invested Capital in Space Technology: $4.64 Billion

In September 2023, total invested capital in space technology was ~$428mm from 21 deals; same deal count but down $113mm in invested capital month over month. Median pre-$ valuation was $41.3mm (post-$: $45.5mm) and median deal size was $3.25mm. This month’s invested capital spanned across 9 countries with business models including solar arrays, warp drive technology, innovative launch services, on-orbit servicing, space tourism, EO satellites, design / simulation software and more.

September Leader Board:

1. Sierra Space raised a $290mm Series B led by Japan-based investors with Uses of Funds to accelerate work on its Dream Chaser vehicle and commercial space stations (interesting Use of Funds given rocky relationship with Blue and potential end of Orbital Reef). Sierra Space is now valued at $5.3 Billion.

2. Open Cosmos, a UK-based Earth observation satellite business, raised a $50mm Series B led by ETF Partners, Trill Impact and A&G. Uses of Funds include footprint expansion to Latin America, the Middle East and Asia Pacific as well as scaling up bus size.

3. SpinLaunch raised $28.7mm of additional Series B funding from Sumitomo Corporation and other undisclosed investors on September 8, 2023. The Company’s pre-$ valuation is estimated at $171mm.

Regulatory Rundown

Our rapid-growth space economy is gaining more visibility across the globe. Regulatory Rundown covers select space policies, evolving legislation updates, licensing requirements and top stories involving regulatory bodies.

NASA’s seven-year OSIRIS-REx mission to retrieve a pristine regolith sample from Asteroid 101955 Bennu came to a spectacular conclusion on Sunday, September 24 with the Lockheed Martin-built Sample Return Capsule gently touching down in the Utah Test and Training Range’s high desert landscape while stabilized by parachute. But while the OSIRIS-REx mission made a delicate Entry, Descent and Landing (EDL) sequence appear almost flawless, a different capsule is currently prohibited from attempting a similar re-entry using the same airway at the Utah Test and Training Range because of a regulatory snafu with the Federal Aviation Administration. 

Varda Space Industries launched their inaugural in-space manufacturing mission on Transporter-8 on June 12th and by June 30th the El Segundo, CA-based startup announced that they had successfully crystalized an HIV treatment medication called ritonavir onboard their W-Series 1 spacecraft. For any company (and especially one that was founded in November 2020), this is a profound achievement on multiple levels. But to truly commercialize their experimental microgravity pharmaceutical processing methodology, the Varda team must also prove that they’re capable of executing re-entry and safely returning the ritonavir payload to Earth. Varda conducted a vehicle system test in October 2022, during which they successfully demonstrated parachute deployment for a representative re-entry capsule dropped from a fixed wing aircraft from approximately 13,000 feet in altitude. This event served to retire risk and built a great deal of confidence in the Varda team’s technical abilities. But at the time of this writing, the Federal Aviation Administration has yet to issue Varda a license to re-enter Earth’s atmosphere. Even under the FAA’s new Part 450 regulations, which were rolled out in March 2021 at the recommendation of the National Space Council to streamline both the launch and re-entry licensing process, the gating factor to Varda’s business model remains obtaining legal permission to attempt to recover the ritonavir payload (which, if processed successfully, could be worth millions).

To Varda’s further credit, they’ve been working with the FAA for over two-and-a-half years to obtain proper licensure under Part 450 regulations to re-enter their capsule. They’re also the first group to seek such a license, and they even designed their capsule to operate in space for up to one year in the event of an extended delay. But what’s increasingly clear for Varda and other teams looking at bold concepts of operations wherein returning a payload to Earth defines success is that close and careful coordination with licensing authorities like the FAA will be fundamental to ensuring the timeliness of any monetization strategy.

Ultimately, the health of the burgeoning cislunar economy will depend on the consistent and reliable ability of commercial space companies to re-enter Earth’s atmosphere through a navigable regulatory framework.

Force Multiplier

A commonly referenced term within the DoD, a force multiplier is a tool, strategy or person that, when added to or employed by a team, significantly increases mission success and team potential. Each month, you’ll find select force multipliers enabling space companies to level up as they look to scale.

New Leadership.

Known for moving slowly, Blue Origin has decided a change in leadership is needed as the launch Company who was founded 2 years before SpaceX is behind all of their competition (across its product suite). Before serving as CEO of Blue, Bob Smith worked in decision making seats at Aerospace Corporation and Honeywell Aerospace which might describe why he was an excellent pick by Jeff Bezos to run his space business whose motto is, “Gradatim Ferociter” which is Latin for “Step by Step, Ferociously.” Replacing Bob Smith at Blue starting December 4 is David Limp.

David Limp joins Blue following noteworthy time at Amazon as SVP for Devices and Services where he oversaw the development of major products like Alexa, Echo, Kindle, Zoox (autonomous vehicles) and Fire TV. Limp also has experience with M&A integration (we’ll see how this affects Blue’s inorganic growth strategy) and help ramp up Amazon’s Project Kuiper mega constellation.

Strategic Acquisition.

San Diego based General Atomics acquired electro-optical sensor supplier, EO Vista. Based in Massachusetts, EO Vista will strengthen GA’s EMS (electromagnetic systems) group. Their relationship dates back to 2020 when General Atomics down-selected the company as its supplier for a US Space Force weather imaging satellite program. EO Vista’s product suite has a number of national security / intelligence community applications. General Atomics most recent acquisition prior to EO Vista was in June of 2021 when they bolted-on Swiss-based optoelectronic instrumentation provider, Synopta. Terms of both txns were not disclosed.

Tracked Opportunities

Approach Venture is tracking more than 150 active federal solicitations for space and defense-related capabilities. Below contains an illustrative list of opportunities. To identify more targeted opportunities tied to your respective roadmap, Connect with Approach to learn more.

• DoD’s SBIR 2023.3 and 2023.4 topics solicit a range of defense-critical technologies. These 100+ solicitations span open topics, space domain awareness capabilities and sensors, novel manufacturing for hypersonics, autonomous robotic systems, innovations for directed energy technologies, and more.

• DIU is seeking an Enterprise Test Vehicle, an open architecture vehicle that will accelerate capability development and fielding across all weapons programs by enabling the integration, testing, and qualification of different subsystems, capabilities, and materials. DIU’s objective is to demonstrate an aerial platform that prioritizes affordability and distributed mass production.

• NASA Goddard Space Flight Center released their final RFP for Geostationary Extended Observations (GeoXO) for the end-to-end acquisition of seven geostationary spacecraft which will provide critical environmental observations, weather forecasting and warnings, climatologic analysis and prediction, ocean biochemistry, ecosystems management, and safe air and marine transportation. GeoXO is the follow-on to the GOES-R series of spacecraft operated by NOAA.

• DARPA announced its Microsystem Exploration program to solicit disruptive microsystem applications in command, control, communications, computer, intelligence, surveillance, and reconnaissance (C4ISR), electronic warfare, and directed energy.

Founder Tip

Creating process and team involvement in employee onboarding improves Company culture and retention.

The first day any employee (junior or senior) joins your team is an important one to them and should be to you whether it’s employee #1 or #1,000. Not only is this their first day on the job but also initial impression of Company culture and whether or not the leadership team takes care of their people (no, this is not just on Direct Managers).

Having a streamlined, collaborative process in place inclusive of HR, IT, Operations and Direct Manager involvement is a good initial start. Ensuring your new hire is set up for success from day one is something they’ll always remember (and pass along to future hires) which includes having all of the tools needed to be effective (i.e. company laptop, proper access to documentation / online platforms, assigned equipment, building access, employee handbook, etc.). Always remember, the people build the business, not the other way around…

For more information including an onboarding checklist, Connect with Approach.

Did You Know?

The DoD has multiple initiatives that can help sponsor (and fund) a facility clearance for you company. Approach Venture is actively providing proposal writing & capture management services for new space businesses.