Starburst Aerospace in talks to raise $50 million fund for space investments

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TAMPA, Fla. — U.S. accelerator Starburst Aerospace plans to raise a $50 million fund this year to invest in space startups, CEO Francois Chopard told SpaceNews in an interview.

The company came close to securing a $200 million fund for similar purposes five years ago, before anchor investors pulled out in the final stages.

“We disappointed a lot of people, but we’ve been able to move forward, to grow the company and adapt our business,” Chopard said.

Starburst instead focused on developing a business as an aerospace and defense accelerator when its debut fund fell through, acquiring equity in startups in exchange for consulting services and connecting them with governments and established companies.

It now counts around 60 companies in its portfolio, including Momentus, Orbital Sidekick and Skyloom that are in the space business.

Momentus, and some others it has invested in that are not space-related, are on course to raise significant sums of money this year by going public through merging with SPACs, or special purpose acquisition companies.

Shareholders in Stable Road Acquisition Corporation, the publicly listed SPAC seeking to merge with Momentus, approved an extension May 13 to complete their deal following delays caused by U.S. government reviews over foreign ownership concerns.

Chopard expects a resolution on Momentus soon, and said the progress being made by this and other startups are encouraging the accelerator to revisit its own fund.

“That track record is putting us back on the scene of raising a fund, and we are actively working on that,” he said.

Starburst was founded in 2012 but has grown from around 10 to 60 people in the last five years, expanding operations to eight countries as it builds out a global presence.

The company announced the launch of operations in Spain April 20, and is in talks to deploy accelerator programs in other countries after recently opening offices in India and South Korea. It also has a presence in the U.S., where it is headquartered, France, Germany, Israel and Singapore.

Partnering with customers

Customers in the U.S. include the Space Force, NASA and Northrop Grumman.

Last year, Starburst and the University of California, Los Angeles (UCLA) won a $1.4 million government grant, matched with private funds, to create an aerospace innovation hub.

Chopard said Starburst has also won a similar contract in France. 

Meanwhile, it is in talks to raise a small early-stage fund in Tel Aviv to invest in Israeli early-stage startups. 

The plan is to raise multiple, smaller-scale local funds to invest in very early-stage seed rounds, in addition to running a larger fund.

Chopard noted a lot of interest from wealthy individuals in Tel Aviv to invest in local space companies, as well as in Los Angeles, Munich and Paris. 

“We would like to do a larger fund to do Series A investments in our most interesting startups, but we would like also to raise locally $10-15 million to invest in more early-stage companies that we are working with,” he added.

While early-stage investors Seraphim Capital of the U.K. and U.S.-based Space Capital have been building a position in space startups in recent years, Chopard points to Starburst’s expanding international network as a key advantage.

Starburst has forged close ties with aerospace and defense businesses and governments worldwide because they have been funding its work as an accelerator, according to Chopard.

He said: “The thing is, if Boeing or Northrop says no to your product, what can you do? So you need to be able to tap into the European and Asian ecosystems to have more chances to succeed.”

He added: “When you look at all the money that is necessary to grow these startups, having not just one but two, three, five early-stage venture funds dedicated to aerospace and defense makes a lot of sense.”