Rocket Lab Electron first stage (Source: Rocket Lab website)

Space SPAC fever goes into high gear with Rocket Lab, Spire announcements

Going public through a special purpose acquisition company (SPAC) is extremely popular for the New Space industry these days, with Rocket Lab and Spire Global announcing they will go through the process to raise money.   Rocket Lab expects to have a war chest of around $750 million (including other cash on hand) when its deal closes while Spire will haul in around $475 million.  Both companies are building service-focused businesses, rather than one-time sales of hardware.

Rocket Lab expects the company to be valued at $4.1 billion, with the transaction expected to close in the second quarter of this year and its stock trading on NASDAQ with under the RKLB symbol.  The company expects to generate positively adjusted EBDITA in 2023, positive cash flow in 2024, and more than one billion in revenue by 2026, according to a company media release.

The $750 million raised will go to “fund development of reusable Neutron launch vehicle with an 8-ton payload lift capacity tailored for mega constellations, deep space missions and human spaceflight” along with funding “organic and inorganic growth in the space systems market and support expansion into space applications enabling Rocket Lab to deliver data and services from space.”

Neutron is expected to make its first flight in 2024 from NASA Wallops with the first stage landing downrange on an ocean barge.  The launch vehicle is optimized for launching satellite constellations, with the capability to put up to 8 tons into orbit and designed for high-flight-rates.  Rocket Lab says it is looking for a place to build a new factory for large-scale Neutron manufacturing “adding hundreds of jobs” to Rocket Lab’s payroll.

Spire Global is anticipating being valued at around $1.6 billion. The company operates a constellation of 100 satellites and has been commercial operations for several years, providing AIS ship-tracking, ADS-B aircraft tracking, and GPS radar occultation weather data to a number of industries.  Spire also offers a number of value-added services, including its own weather service and the ability to host virtual and physical payloads onboard its satellites, as well as building customized satellites for customers.

Funds from the SPAC will go to fund expansion across key vertical markets and geographies and accelerate sales, marketing, and product development. The SPAC is expected to be completed in the summer of 2021.  

Spire is preaching “space-as-a-service” business model, delivering data to customers through APIs through a simple subscription agreement, rather than firms building and operating their own satellite fleets.  It is similar to the Planet Labs philosophy of being a data company, rather than a satellite operations company, with Planet’s value build around the collection and analysis of imagery.

Other New Space companies that are taking the SPAC route to cash and public trading are AST & Science, Astra, BlackSky, and Momentus.  In 2019, Virgin Galactic was the first space company to SPAC. 

Will others do the same?  Speculation has been high that Planet might do a SPAC.  Relativity Space may also be considering a SPAC, but it raised $500 million back in November, giving it a $2.3 billion valuation.

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

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