Rocket Lab raises $75 million to scale up launch vehicle production
WASHINGTON — Rocket Lab, a U.S.-New Zealand company developing a small launch vehicle, announced March 21 that it has raised an additional $75 million that will help the company scale up production of the rocket.
The new funding round is led by venture capital firm Data Collective, with contributions from another VC firm, Promus Ventures, and an undisclosed investor. Several prior investors, including Bessemer Venture Partners, Khosla Ventures and K1W1, also participated in the round.
Rocket Lab said the Series D round brings the total raised by the company to $148 million, and values the company at more than $1 billion. Rocket Lab announced a Series B round of unspecified size in 2015, and Peter Beck, the company’s chief executive, said the company did an unannounced Series C round in the interim involving only existing investors.
In an interview, Beck said the money will go towards increasing the production capacity for its Electron rocket, set to make its debut later this year. “This is really all about scaling,” he said. “The funding is all about producing the vehicle in much more significant numbers.”
As part of that effort, the company has moved into a new headquarters facility in Huntington Beach, California. The 150,000-square foot building will be used to manufacture engines for the Electron rocket as well as electronics systems. The vehicles themselves will continue to be assembled at a factory in New Zealand, although Beck said it’s possible in the future that some rockets will be built in California as well, particularly for launches from U.S. sites.
The Electron rocket is designed to serve the burgeoning small satellite market, with the capability to place up to 150 kilograms into a 500-kilometer sun-synchronous orbit. Rocket Lab recently shipped the first Electron to its launch site on New Zealand’s Mahia Peninsula for testing.
That testing is continuing, with a focus on preparing the launch site rather than the rocket. “Most of the commission operations that are occurring down there are for the launch range. The vehicle is ready to fly,” he said. He would not commit to a specific schedule for the vehicle’s first launch other than the “coming months.”
Despite the uncertain schedule, Beck said Rocket Lab still planned to conduct five to seven launches this year. Those include three test flights as well as a launch for Moon Express, a company facing an end-of-2017 deadline for launching a lunar lander to win the $20 million Google Lunar X Prize. Another launch would be for NASA’s Venture Class Launch Services program under a contract awarded in October 2015.
Beck said the company has a large backlog, although he didn’t mention the number of launches under contract. That demand, he said, was a driver for scaling up production, enabled by the new funding round.
He added he wasn’t concerned about a potential consolidation in one part of the small satellite market, Earth imaging, which has the potential to reduce demand. “We see an expanding market, not a shrinking one,” he said. “We’re excited about what we’re seeing. For us, it’s more a question of if we can build rockets fast enough rather than does a market exist.”
Rocket Lab’s new investors share that optimism. “With Rocket Lab, this huge backlog [of smallsats] now has access to a high-frequency, quality launch service that will take customers where they want to go, when they want to fly. The commercial and humanitarian applications this will open up are endless, and it should unleash a torrent of financing for space innovation,” said Matt Ocko, managing partner at Data Collective, in a statement.
“Launch has been the prime barrier to market entry in small satellites, and we firmly believe Rocket Lab will successfully fill this void,” said Mike Collett, founder and managing partner of Promus Ventures, in a statement.
Both funds have invested in other space companies — Data Collective in Planet and Promus in Spire — although the bulk of their portfolio is in software and other industries outside of space. The space experience they do have, Beck said, was a key reason he agreed to accept funding from them.
“We wanted investors who understand the space industry,” he said, “people who understand the trials and tribulations but also the potential that it has.”