Amid a bonanza of retail hype around space tech, South Australia’s Southern Launch has raised $25 million. That includes investment from the National Reconstruction Fund and former Macquarie CEO Nicholas Moore.
Last January US startup Varda Space Industries launched a capsule containing machinery that allows it to manufacture new types of pharmaceuticals in orbit. When that capsule landed in South Australia a month later, it became the first in the world to re-enter the atmosphere and land at a commercial facility instead of a military base.
Southern Launch, the company that runs that commercial facility, on Tuesday announced it had raised $25 million in a fresh fundraising round led by national security investor Brindabella & Company. The National Reconstruction Fund Corporation pitched $10 million in.
Southern Launch was founded in 2017 and runs two spaceports in South Australia, bases from which rockets can launch and onto which they can re-enter. It has eschewed startup-style fundraising because of its ability to fund operations with forward payments from customers, but founder Lloyd Damp said the influx of cash is necessary to meet ballooning demand.
“It’ll help accelerate the development of our Whaler’s Way site and expand what we can offer from that facility,” he told Forbes Australia. “We can bring our launchpads online sooner for our customers. We’ve got so many international and domestic customers wanting to use the site, so this is that next step forward for us to meet that market timeline.”
Former Macquarie CEO Nicholas Moore participated in the funding round alongside his former CFO Alex Harvey as well as Coupland Asset Management.
The investment comes as investors around the world grapple with the promise of space tech thanks to SpaceX, which raised US$75 billion in its blockbuster IPO earlier this month. The company has become something of a meme stock: It has surged to a valuation of over US$2 trillion despite its annual revenue being about a 111th of that, with backers buying into Musk’s claim that SpaceX will soon facilitate data centres in space.
NRF chief investment officer Mary Manning said, despite the volatility, SpaceX has caused a rising tide that will lift all boats.
“For a lot of people who are maybe less familiar with the sector, reading the [SpaceX] prospectus and some of the research that’s come out has opened people’s minds to, ‘there’s going to be data centres in space, this and that can happen in space, and all this, so I think it’s been a very positive thing in terms of just opening up the possibilities.”
Damp declined to say what valuation the company raised capital at, noting it is an infrastructure business and thus not valued like a typical startup. It provides a port for both orbital and suborbital rocket launches, and it manages huge swathes of land, sea and air for re-entry missions. But if Southern Launch offers a practical, quotidian business, its customers thus far are anything but.
Perhaps its most exotic is Varda, which says the absence of gravity allows it to make pharmaceuticals that would be impossible on Earth. The startup last year raised US$187 million from the likes of Peter Thiel and Vinod Khosla. Under the agreement Varda launches its capsule into space aboard rockets operated by the likes of SpaceX and, once the work is done in orbit, it utilises Southern Launch’s re-entry facilities.
Another is Space Forge, a British company seeking to manufacture silicon wafers in orbit which when returned to Earth could enable new semiconductor designs. Lux Aeterna, meanwhile, develops reusable satellites.
“There is limited capacity around the world, so the fact that capacity is coming online in Australia… is really positive,” said Manning.
Manning told Forbes Australia the investment would bolster sovereign capability and boost jobs in the local area. Southern Launch will grow from 35 employees to around 185 people by 2032, the company says. By then Damp hopes it will be generating “hundreds of millions of dollars.”
Alongside quantum computing, space has been a recurring theme for investment from the NRF. Its backing of Southern Launch comes after its investments in Gilmour Space Technologies ($75 million), satellite startup Myriota ($25 million) and reusable jet engine developer Hypersonix ($10 million).
Southern Launch is the NRF’s 29th investment, bringing total capital deployed to $1.64 billion.
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