Sierra Space raises $1.4 billion

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Updated 11:30 a.m. Eastern with comments from Tom Vice.

WASHINGTON — Sierra Space, the space subsidiary of Sierra Nevada Corporation (SNC), has raised $1.4 billion in a Series A round that values the company at $4.5 billion.

The company announced the round Nov. 19, led by General Atlantic, Coatue and Moore Strategic Ventures, with participation from funds and accounts managed by BlackRock Private Equity Partners, AE Industrial Partners and various strategic family offices. Sierra Space calls the round the second largest private capital round in the aerospace and defense sector ever.

“General Atlantic and our fellow co-investors are proud to support Sierra Space in its vision to define the future of the commercial space economy,” said Bill Ford, chairman and chief executive of General Atlantic, in a statement. “The company has harnessed advanced technologies and a culture of innovation to develop products that have transformative potential, and that position Sierra Space as an emerging leader in the new space age. We look forward to providing active partnership to Sierra Space and its management team to accelerate its growth and magnify its global impact.”

In a Nov. 19 interview, Tom Vice, chief executive of Sierra Space, said the company considered a range of options for the funding, including going public through a traditional initial public offering or a merger with a special purpose acquisition company (SPAC). “We decided to take a deeper look into remaining private, bringing together a group of investors who really share the long-term, high-growth plan,” he said. The funding raised in this round will support company operation through 2024.

The company will use about two thirds of the funds for work on Dream Chaser, the lifting-body vehicle it is building for to transport cargo for the International Space Station starting in late 2022. That includes development of a crewed version of the vehicle that could make its first flight with people on board as soon as 2025, Vice said.

Sierra Space is also investigating the possibility of developing a version of Dream Chaser for national security applications. He declined to comment on specific differences between that version of Dream Chaser and those used for commercial cargo and crew versions. “The performance of the spaceplane, its capabilities and its payload size would all be informed by national security needs, which are likely to be different than what the civil or commercial needs would be,” he said.

The other one third of the funds will support development of its Large Integrated Flexible Environment (LIFE) inflatable module. That includes completing the design of the module, which has a volume of 300 cubic meters once expanded to its full size in orbit, as well as soft-goods certification of the module’s materials. Vice said the company is also studying future, larger versions.

Both LIFE and Dream Chaser are part of Orbital Reef, the commercial space station concept announced Oct. 25 by a team that includes Sierra Space along with Blue Origin, Boeing and Redwire. “Right now we are very focused on all of the development associated with Orbital Reef and have Orbital Reef on orbit, open for business and generating revenues, in 2027,” he said.

Sierra Space currently has about 1,100 employees, which Vice said he expected to double in the next 18 months. That includes an expanded presence in Florida, where the company is working with NASA and state officials on a proposed facility at the Kennedy Space Center for the servicing and maintenance of Dream Chaser vehicles.

Sierra Space has relied until now on investment from SNC’s founders, Fatih and Eren Ozmen. At the Oct. 25 announcement of Orbital Reef, Janet Kavandi, president of Sierra Space, said that SNC has put more than $1 billion into Dream Chaser development and an unspecified amount into LIFE.

SNC spun off its space division, established in 2008, into Sierra Space in April. Part of the reason for creating Sierra Space was to allow it to take outside investment to fuel its growth.

Vice said Sierra Space will “continue to keep all options in front of us” for future funding, including going public in the future. With sufficient funding through 2024, he said the company will start “deeper dive” examinations of future funding options in about a year, and “start to make some decisions in the first quarter of 2023.”

“We have worked hard for years to nurture the Sierra Space business from its genesis in 2008 to today, where it has significantly grown to hold a very unique and strategic position in the rapidly expanding commercial space sector,” Fatih Ozmen, chief executive of SNC and chairman of the board of Sierra Space, said in the statement. “Sierra Space now has the right scale, and with its leading-edge technologies and turnkey capabilities is poised to significantly accelerate growth with this investment.”