WASHINGTON — Apex, a startup with plans to mass-manufacture satellite buses, has raised $16 million to fund development of its first large-scale factory.
Apex announced June 22 it raised the Series A round, led by venture firms Andreessen Horowitz and Shield Capital. The company has raised more than $27 million to date, including a seed round it announced in October 2022.
The funds will be used for what the company calls Factory One, a 4,600-square-meter production facility in Los Angeles that the company will use to ramp up production of its Aries satellite bus. The company, building its first Aries spacecraft now, projects scaling up production to five in 2024, 20 in 2025 and as many as 100 in 2026.
Ian Cinnamon, chief executive of Apex, said in an interview that the company was able to raise more money than originally planned for the Series A round because of strong investor interest. “We feel incredibly grateful that it was significantly oversubscribed, where we had a lot of investors that wanted to invest that, unfortunately, we just didn’t have room to bring them in.”
He said the fundraising climate for space companies had changed in the last year because of both broader macroeonomic issues, like higher inflation and interest rates, as well as struggles among companies in the industry. That’s driving investors to companies with a near-term focus on products and services than can generate revenue, he argued.
“In today’s climate, investors are really looking for companies that have clear paths to being able to produce revenue, and business models that not only would grow massively in the future but are solid business models in today’s market,” he said. “It’s things that are real businesses today that can grow in the future.”
Apex is building its first Aries satellite, dubbed “Call to Adventure,” that it announced in April. That spacecraft remains on schedule to launch on the SpaceX Transporter-10 rideshare mission in early 2024.
That spacecraft will carry payloads for three customers: space refueling company Orbit Fab, autonomous satellite technology developer Ubotica and an unnamed “tier one” defense contractor. Cinnamon said he could not disclose that contractor other than to say it is a “household name.” That mission, he added, is now fully booked.
He said Apex has strong interest among potential customers for this first flight, so was able to find three customers with sufficiently different missions that they could be accommodated on the same spacecraft without any conflicts. However, in the future the company plans to sell satellites to individual customers rather than host multiple customers on the same satellite, a model called “condosats” in the industry.
“Part of the reason that we don’t want to continue doing condosats is that it’s not easy coordinating all those efforts,” he said.
The announcement of the funding round and customers for its first mission came shortly after Apex rolled out a tool on its website to allow customers to configure satellites. The tool, similar to those used for ordering cars or computers, offers several options for power, communications and propulsion, and lists the price of that option.
Cinnamon said the company is offering that configuration tool because it plans to offer a limited number of options for satellites, which he likened to the stock-keeping units, or SKUs, used in retail. Apex is also minimizing the amount of customization or non-recurring engineering (NRE) it offers customers.
“If you’re not doing NRE and you have a set number of SKUs, that means we know exactly what our costs are, what our labor is,” he said, enabling “transparent” pricing of its satellite buses. “We believe that the industry deserves that transparent pricing and to cut through a lot of the back-and-forth that I think slows down the industry and hampers innovation.”
He said that “thousands” had tried out the tool since it rolled it out earlier in the month, leading to inquiries from potential customers to confirm that the prices quoted online are accurate. He did not confirm if it led to any orders yet, but said the company has sold part of a second set of five satellites it is building in 2024.