Relativity raises $650 million round, announces Terran R rocket
WASHINGTON — Relativity Space announced June 8 it has raised $650 million in a new funding round to support development of a fully reusable launch vehicle far larger than its original Terran 1 rocket.
Relativity said Fidelity led its Series E round with participation from new investors BlackRock, Centricus, Coatue and Soroban Capital. Existing investors also contributed to the round, including Ballie Gifford, K5 Global, Tiger Global, Tribe Capital, XN and a number of individuals. The company did not disclose its valuation after the round, but an industry source familiar with the deal estimated it at $4.2 billion.
The company says the funding, which comes barely half a year after it raised a $500 million Series D round, will allow the company to accelerate development of the Terran R, a much larger rocket than the Terran 1 it is currently building and one that is intended to be fully reusable. Relativity is targeting a first launch of Terran R in 2024.
In an interview, Tim Ellis, chief executive of Relativity, said the plans for Terran R date back to the company’s founding in the Y Combinator business accelerator. “It’s actually been in the plans since five years ago, when I founded the company. We just haven’t talked about it yet,” he said. “But even in Y Combinator, we were talking about building a fully reusable rocket that was larger than Falcon 9.”
Terran R is designed to carry payloads in excess of 20,000 kilograms into low Earth orbit. The first stage will use seven Aeon R engines, each producing 302,000 pounds-force of thrust, while the second stage will use a single Aeon Vac engine. The engines are based on the Aeon 1 engine Relativity created for the Terran 1 small launch vehicle, and use methane and liquid oxygen propellants. Relativity said it completed full-duration testing of a “pathfinder” engine earlier this year.
Another key element of Terran R is Relativity’s intent to make the vehicle fully reusable, including its upper stage and payload fairing. “There won’t be a part that’s not reusable on the vehicle,” Ellis said, crediting that to the company’s significant investment in 3D-printing technologies.
“3D printing actually will help us make a far better reusable rocket that couldn’t really exist with traditional manufacturing,” he said. “We’re looking at algorithmically generated and optimized structures to reduce mass that can only be built using 3D printing, as well as exotic 3D printed materials.” That includes, on the second stage, using “exotic” alloys with greater temperature resistance while remaining lightweight.
Relativity is the latest in a line of companies that entered the launch market with small vehicles but are now moving to larger ones. Rocket Lab announced in March its plans to build Neutron, a medium-class vehicle capable of placing 8,000 kilograms into low Earth orbit. Firefly Aerospace, whose Alpha rocket is nearing its first launch, is working on a larger vehicle, called Beta.
Relativity will continue development of the smaller Terran 1, capable of placing up to 1,250 kilograms into low Earth orbit. “We see almost insatiable demand for that vehicle right now,” Ellis said. “We’ve always seen Relativity as a multi-product 3D-printing company.”
The first launch of Terran 1 is currently scheduled for late this year from Launch Complex 16 at Cape Canaveral Space Force Station in Florida, which will also be used for Terran R launches. “We’re fighting hard to get that launch off in 2021,” he said.
The funding round will enable continued growth of Relativity. Ellis said the company currently has about 400 employees, nearly four times the number it had a year and a half ago, and he expected to hire “a few hundred more people” by the end of the year.
Relativity had no problem raising the funding despite having just raised a $500 million round, citing “inbound” interest from current and new investors. While Ellis cited a “trillion-dollar long-term opportunity in aerospace development” using the company’s 3D-printing technologies, he said this funding round is focused on getting Terran R to first launch.
Ellis said Relativity did not consider going public through a merger with a special purpose acquisition company (SPAC), a route that launch vehicle companies Astra and Rocket Lab are pursuing. “We didn’t need to because there was so much private capital available,” he said, allowing the company to avoid the hassles of going public, either through a space or a more traditional initial public offering (IPO).
“I think we could be a great public company and do something like a traditional IPO when the time’s right,” he said. “But right now, given the sheer amount of capital and interest that we are seeing, it just made total sense to stay private.”