Demand for sending satellites into space remains strong, but US rocket start-ups are taking drastic measures to survive a tight funding environment where fears have been exacerbated by the bankruptcy of Virgin Orbit.
The industry faces an interesting dichotomy. Demand has surged from launching a few satellites on small rockets to launching swarms of satellites at once using bigger rockets, even as investors shy away from the sector in search of safer bets.
Venture investment in space start-ups has dropped 50 per cent year-on-year in 2022 to $21.9 billion, according to venture capital firm Space Capital.
As the cost of capital rises with the Federal Reserve's interest rate hikes, investors are less incentivised to fund capital intensive projects that do not have a clear revenue stream or path to profitability, leaving many space start-ups scrambling for funds.
"I've never raised capital in a harder market than the one we're in right now," Firefly Aerospace chief executive Bill Weber said.
"The I word and the R word — recession and inflation — make the investment market conservative and a little more cautious."
The failure of billionaire Richard Branson's Virgin Orbit, which filed for bankruptcy this month, has only ratcheted up pressure on rivals trying to keep up with Elon Musk's SpaceX, Rocket Lab and the Boeing-Lockheed Martin joint venture, United Launch Alliance.
Texas-based Firefly is trying to mass-produce its medium-sized rocket, while developing a larger launcher under a new partnership with Northrop Grumman.
Fresh off celebrating its Alpha rocket's orbital debut last October, Firefly tried to raise $300 million by year-end to become cash-flow positive. By mid-February, it had only raised $30 million according to regulatory filings, although Mr Weber said since then the company had reached about 75 per cent of target.
Firefly expects to hold another funding round in mid-2024, Mr Weber said.
Last week, Relativity Space said it was ditching its centrepiece small rocket, Terran 1, for a larger planned rocket, Terran R, a decision roughly a year in the making as demand for small rockets faded, chief executive Tim Ellis said.
The California-based company to date has raised $1.3 billion, compared to Firefly's total $390 million which includes some funds from the continuing fund-raising effort.
"It was a lot better to just put those resources into Terran R because that's going to be a way-more-profitable way to allocate the team that we have," Mr Ellis said.
The bigger rocket's planned debut in 2026 will leave the company without any missions for roughly three years, but Mr Ellis said he is not worried about future funding and declined to say when the company would do another funding round.
Astra Space, which ditched its small Rocket 3.3 for a planned, larger Rocket 4 in the next few years, has struggled to bring its stock price above $1, facing delisting threats from Nasdaq. Astra declined to comment on its financial struggles.
Firefly and Astra have added other business lines to make up for lost revenue, while Relativity has said its 3D printers used in rocket construction will be eventually employed for other products.
Firefly, which was forced by US officials in 2021 to sever its Ukrainian ties through Noosphere Ventures over national security concerns, counts a lunar lander named Blue Ghost as a "very profitable" line of revenue, Mr Weber said.
Despite the start-ups' struggles, launch demand has soared after sanctions following the Russia-Ukraine conflict cut off access to Russian rockets. Recent failures with Europe's Arianespace's Vega-C rocket have added to demand in the US, outstripping the number of available rockets.
Shared missions to space on SpaceX's Falcon 9 rockets, a cheaper, so-called ride-share option for satellite companies that helped kill the business case for small rockets, have taken some of that demand, but much of it remains.
Private plans to deploy mega-constellations, vast swarms of satellites in low-Earth orbit, have also given launch start-ups hope for future demand.
"The industry is now behaving as a more rational, capitalistic industry," Erich Fischer, a senior partner at Bain and Co who advises space companies, said. "It's never behaved that way before, ever."
COMPANY%20PROFILE
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WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
CRICKET%20WORLD%20CUP%20QUALIFIER%2C%20ZIMBABWE%20
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Napoleon
%3Cp%3E%3Cstrong%3EDirector%3C%2Fstrong%3E%3A%20Ridley%20Scott%3Cbr%3E%3Cstrong%3EStars%3C%2Fstrong%3E%3A%20Joaquin%20Phoenix%2C%20Vanessa%20Kirby%2C%20Tahar%20Rahim%3Cbr%3E%3Cstrong%3ERating%3C%2Fstrong%3E%3A%202%2F5%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
No_One Ever Really Dies
N*E*R*D
(I Am Other/Columbia)
The specs: 2017 Porsche 718 Cayman
Price, base / as tested Dh222,500 / Dh296,870
Engine 2.0L, flat four-cylinder
Transmission Seven-speed PDK
Power 300hp @ 6,500rpm
Torque 380hp @ 1,950rpm
Fuel economy, combined 6.9L / 100km
UAE%20ILT20
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More on Turkey's Syria offence
SERIES SCHEDULE
First Test, Galle International Stadium
July 26-30
Second Test, Sinhalese Sports Club Ground
August 3-7
Third Test, Pallekele International Stadium
August 12-16
First ODI, Rangiri Dambulla Stadium
August 20
Second ODI, Pallekele International Stadium
August 24
Third ODI, Pallekele International Stadium
August 27
Fourth ODI, R Premadasa Stadium
August 31
Fifth ODI, R Premadasa Stadium
September 3
T20, R Premadasa Stadium
September 6
THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
The%C2%A0specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E4.4-litre%2C%20twin-turbo%20V8%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3Eeight-speed%20auto%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E617hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E750Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3Efrom%20Dh630%2C000%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
I Care A Lot
Directed by: J Blakeson
Starring: Rosamund Pike, Peter Dinklage
3/5 stars
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
Results
6.30pm: Mazrat Al Ruwayah – Group 2 (PA) $36,000 (Dirt) 1,600m, Winner: RB Money To Burn, Tadhg O’Shea (jockey), Eric Lemartinel (trainer)
7.05pm: Handicap (TB) $68,000 (Turf) 2,410m, Winner: Star Safari, William Buick, Charlie Appleby
7.40pm: Meydan Trophy – Conditions (TB) $50,000 (T) 1,900m, Winner: Secret Protector, William Buick, Charlie Appleby
8.15pm: Al Maktoum Challenge Round 2 - Group 2 (TB) $293,000 (D) 1,900m, Winner: Salute The Soldier, Adrie de Vries, Fawzi Nass
8.50pm: Al Rashidiya – Group 2 (TB) $163,000 (T) 1,800m, Winner: Zakouski, William Buick, Charlie Appleby
9.25pm: Handicap (TB) $65,000 (T) 1,000m, Winner: Motafaawit, Sam Hitchcock, Doug Watson
Ipaf in numbers
Established: 2008
Prize money: $50,000 (Dh183,650) for winners and $10,000 for those on the shortlist.
Winning novels: 13
Shortlisted novels: 66
Longlisted novels: 111
Total number of novels submitted: 1,780
Novels translated internationally: 66
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Petrarch: Everywhere a Wanderer
Christopher Celenza,
Reaktion Books
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
UAE currency: the story behind the money in your pockets
Richard Jewell
Director: Clint Eastwood
Stars: Paul Walter Hauser, Sam Rockwell, Brandon Stanley
Two-and-a-half out of five stars
KILLING OF QASSEM SULEIMANI
More on Quran memorisation:
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Cherry
Directed by: Joe and Anthony Russo
Starring: Tom Holland, Ciara Bravo
1/5
COMPANY%20PROFILE
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