3D and a Series C - A New Theory of Relativity

As you may have guessed, this post isn't about Einstein's theory of relativity (amazing as it may be), it's about Relativity Space, another innovative NewSpace company looking to manufacture cheap, miniature rockets for small satellite launches. When we think of commercial space companies, most people think of the big dogs - SpaceX and Blue Origin, along with traditional players like the ULA or Orbital ATK with their large payload boosters. But as satellites continue to shrink and the need for satellite technology continues to proliferate our modern economy, over 100 mini-rocket startups have arisen in the past few years to meet demand. Now the market's oversaturated; there's simply not enough satellite launch demand for all these startups to survive, and of these numerous companies, Rocket Lab is the only one to have had any commercial launches (my most recent article on them here). For the rest of them, survival boils down to unit economics and meeting aggressive development timelines

Relativity co-founders Tim Ellis (left) and Jordan Noone (right) next to a 3D printed Terran 1 second stage

So what's Relativity's strategy to stand above the fierce competition? Founded in 2015 by two former SpaceX and Blue Origin engineers, their theory is that 3D printing (aka additive manufacturing) will be the secret sauce to drastically lowering launch costs, and to that end, the team of ~100 employees has built the world's largest metal 3D printer, Stargate, to develop their Terran 1 rocket. The ultimate goal: make Terran 1 95% 3D printed and ready to fly by the end of 2020, with the capability to 3D print entire rockets within 60 days

Jordan Noone next to Stargate 

There are in fact many different methods of 3D printing, each one best suited to certain applications or materials (learn the others here), and the type Relativity uses is known as selective laser sintering (SLS). The term sinter means to compact a powder into a solid mass through heat or pressure, but without melting the substance - SLS utilizes a laser guided by a computer-aided design 3D model to selectively fuse different areas of the metal powder into fuel tanks, engines, and other rocket parts

Wikipedia's diagram of selective laser sintering 

To date, Relativity has accomplished some pretty significant operational milestones: in March 2018 they signed a 20-year lease at NASA's Stennis Space Center in Mississippi to test fire the Aeon 1 engine that will power Terran 1 for its maiden launch at Cape Canaveral next year. And most impressively, Relativity won the contract to launch Telesat's LEO satellite internet constellation over the next few years (my article on that here). To tie them over until then, Relativity just announced a $140 million Series C funding round from big-name venture funds like Bond and Tribe Capital, Y Combinator, and Social Capital, as well as wealthy individual investors like Mark Cuban. Sounds like they're well on their way, and I'm excited to see their development in the next few years!

Aeon 1 on the test stand at Stennis Space Center

Highly recommend this awesome video of Aeon 1 in action - take a look!

Comparing different commercial space companies' valuations

I figured it'd be cool to juxtapose the valuations over time of the different space startups (I mean, why else would you read a space blog written by an investment banker?) For public companies, getting the latest valuation is easy, just look up the stock ticker and find its market capitalization (stock price x shares outstanding). But for private companies, their valuation can be implied based on the terms of their most recent funding round. For example, Relativity's Series C raised \$140 million in exchange for about ~32% of the equity, implying a valuation of $430 million. I'll show SpaceX's first since its massive valuation is on its own scale

All valuation data from Pitchbook

Notably, there's no way to put a price tag on Blue Origin, since the venture is funded entirely by Jeff Bezos. So below you'll find the valuations over time of other significant commercial space enterprises

Other companies without any public valuation data: Blue Origin, Firefly Aerospace, Sierra Nevada Corporation

Pretty insightful diagram if you ask me! Hopefully if I show these charts again in a few years, their valuations will be sky-high and they'll be joined by a whole host of new entrants

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