Peter Beck discusses Rocket Labs' public listing debut, the space SPACs and Neutron rocket. "This industry and public markets are all about execution. Here, the wheat and the chaff will be separated quickly.
Peter Beck's earliest memory was of his father standing outside in Invercargill New Zealand with him, and looking up at the stars. He was then told that people could be on other planets looking back at him.
That was a remarkable thing for a three- or four-year old. It was a memory that stayed with me forever.
However, 20/20 is always better than foresight. Beck's career was marked by a singular focus on rocketry. Beck chose to work as a tradesman instead of attending university. He was a tool-making apprentice during the day and a rocket engine maker at night. Through my career, I was extremely fortunate that the companies and government organizations I worked for and for encouraged me to use their facilities at night and be tolerated by them.
His talent for tinkering grew with experience, and he started Rocket Lab in 2006. After 21 launches and 15 years, the company went public via a merger with a blank check firm, adding $777 million to its war-chest.
$RKLB is now live! Rocket Labs' next exciting step was possible because of the amazing people who supported us, our family, our customers and our investors. We are grateful to you all. #SpaceIsOpenForBusiness #NasdaqListed pic.twitter.com/DLmVsmtqOj Rocket Lab (@RocketLab) August 25, 2021
Space SPAC is the craze
Rocket Labs' valuation soared to $4.8billion after its merger with Vector Acquisition. This puts it in second place among space launch companies, behind Elon Musks SpaceX. SPACs are a popular way for space companies to go public. A number of companies, including rivals Virgin Orbit and Astra, have started trading through SPAC mergers.
TechCrunch was informed by Beck that Rocket Labs has been planning to go public for many years. The original plan was to do an initial public offering (IPO), but the SPAC route provided certainty about capital and valuation. A March investor presentation was made in advance of the SPAC merger documents. It is important to remember that the future looks bright. Rocket Lab expects revenues of $749m in 2025, and $1 billion in the next year. The company had revenues of $48million in 2019, $33million in 2020 and expects to reach $69 million this year.
He is still skeptical about pre-revenue startups or those that have failed to raise capital and are using SPACs for a financial instrument. There have been many space SPACs that went out. I believe there is a range of quality. Some of these startups failed to raise capital in the private market. A SPAC merger is the last-ditch effort. This is not the way to go public.
Although the space industry is crowded right now with Rocket Lab and SpaceX sending payloads into orbit and many new entrants looking for their place (or more optimistically, taking their lead), Beck stated that he expects the crowd to thin out.
Investors will soon be able to see who executes and who is aspiring to execute. Although there is a lot of excitement right now, execution is the main focus of this industry and the public market. Here, the wheat and the chaff can be separated quickly.
From Electron to Neutron
Rocket Labs' revenues have been mainly from the small payload market. It has managed to be a leader in this segment with its Electron rocket. The Electron rocket is just 59 feet tall, and barely four feet wide. This makes it significantly smaller than the other rockets currently in space. Two launch sites are used by the company: The privately owned launch range on Mahia Peninsula in New Zealand and the launch pad at NASA's Wallops Island facility (which has yet to host a Rocket Lab mission).
Rocket Lab is currently converting Electrons' first-stage booster into a reusable unit. Rocket Lab has developed a new atmosphere reentry and ocean water splashdown process. This uses a parachute that slows the boosters' descent. However, the ultimate goal is to capture it in the air using an aircraft.
Rocket Lab and SpaceX are the dominant players in this market. But, that could soon change. Astra and Relativity both develop small launch vehicles. The latest Astra rocket stands around 40 feet high, while Terran 1 by Relativity is between Electron 9 and Falcon 9 at about 115 feet.
Rocket Lab plans to expand its medium-lift rocketry operations with its highly anticipated (and mysterious) Neutron launch vehicle. Beck explained to SGFF attendees that the company has kept the details of Neutron secret. This is because even the publicly released renderings of Neutron have been a bit misleading. The image below does not bear any resemblance to the actual Neutron, but it is expected to be twice the height of Electron. It will also be capable of sending approximately 8,000 kilograms to low Earth orbit.
TechCrunch was told by he that there are many people in the industry who copy us in many ways. We would rather go a bit further and show the results of our work.
Rocket Lab projects that Electron/Neutron will be able to lift 98% of all satellites launched through 2029. This makes it unnecessary for Rocket Lab to build an additional heavy-lift rocket.
The company is also developing spacecraft. Rocket Lab calls it Photon and envisions it as a satellite platform which can be easily integrated with the Electron rocket. Photon missions have been planned by the company to the moon and beyond. This is part of NASA's Cislunar Automated Positioning System Technology Operations & Navigation Experiment (CAPSTONE).
Two Photons were chosen earlier this month to undertake an 11-month mission on Mars. Beck also discussed long-term plans for a probe into Venus' atmosphere via a Photon satellite.
Rocket Lab has also signed a deal to build a spacecraft with Varda Space Industries, a startup in space manufacturing. The spacecraft will be launched in 2023 or 2024.
Neutron was designed to be human-rated from the beginning, which means that it will meet safety requirements for carrying astronauts. Beck stated that he is certain of the democratization and future growth in spaceflight. He also wants Rocket Lab to be able to provide that service. Beck was unsure if Rocket Lab would ever expand to building spacecraft like human-rated capsules or landers.
He said, "Never, ever, say never." This is the only thing I've learned as a CEO in the space industry.
