Tuesday, April 23, 2024

Astra tests the appetite for outer space

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Astra, a space startup backed by Salesforce’s Marc Benioff and former Google CEO Eric Schmidt, plans to go public next quarter through special-purpose acquisition company (Spac) Holicity.

The four-year-old California-based company will raise up to $ 500 million through the deal, including up to $ 300 million from Holicity and $ 200 million from BlackRock, and will be valued at around $ 2.1 billion. dollars.

The deal comes at a time of heightened interest in Spacs and commercial space companies, an industry whose revenues are expected to nearly triple to $ 1 billion by 2040, according to Morgan Stanley.

Elon Musk’s rocket company SpaceX is expected to be valued at over $ 60 billion in a funding round later this month, while the share price of Virgin Galactic, the company of Richard Branson’s space tourism, has climbed 200% since September.

Ark Invest, an asset manager focused on disruptive technologies, said last month that it would launch a space exploration fund because “falling rocket and satellite costs are shaking up what once seemed like a monopoly industry. and bureaucratic ”.

Astra, which said it already has contracts with more than a dozen companies and governments, accounting for $ 150 million in revenue, is offering low-cost rocket launches and said it will start sending satellites to low Earth orbit later this year.

“We’ll be launching every month at the end of 2021, every week by 2023, every two weeks in 2024, every day by 2025,” CEO and co-founder Chris Kemp told the Financial Times.

Astra’s team of about 100 employees launched its first rocket into space from Alaska in mid-December. Although it hasn’t reached orbit, the company is one of the few to reach space after SpaceX in 2008 and start-up Rocket Lab in 2018. Virgin Orbit, a small satellite launch service separate from Virgin Galactic, went further than Astra last month by reaching low orbit and deploying 10 satellites.

Astra’s goal is to launch hundreds of low-cost satellites on behalf of customers who want to broadcast high-speed Internet, connect the “Internet of Things”, enable photography and contribute to national security. Among its contracts is an agreement with the US Space Force to develop the ability to launch a drone into space – where it can travel 40,000 kilometers an hour – and land it anywhere else. on Earth in less than 45 minutes.

“We are mass producing the rocket for about a tenth of someone else’s,” Mr. Kemp said. “Virgin has to fly a 747 with passengers and they’re currently charging $ 12.5 million for a flight – we’re currently billing $ 3 million. We are therefore four times cheaper than Virgin and three times cheaper than Rocket Lab. “

Mr. Kemp is a serial entrepreneur who spent around five years at NASA, becoming CTO in 2010, before co-founding OpenStack, a platform for cloud computing. He also spent eight years as an advisor to Planet, the California-based company that owns hundreds of satellites in space that capture images of the Earth’s surface daily.

Holicity, the blank check company merging with Astra, was founded a year ago by Craig McCaw, a billionaire entrepreneur with a background in cellular networks.

Mr McCaw said he was drawn to Astra’s “ruthlessly simple platform idea” and its “incredibly rapid deployment capability”. Astra was happy to hand off giant rocket launches to SpaceX, he said, and would instead focus on smaller satellite launches that can offer companies a “suite of services” in space.

When the deal closes, Astra will be the first space company to trade on the Nasdaq, under the symbol ASTR. The deal is expected to close in the second quarter, with existing Astra shareholders owning 78% of the company.

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