One way to think about SPACs is that they democratize access to public markets by allowing companies to provide detailed financial projections of the future. In a traditional IPO process, you typically won’t say a word about future projections because you run the risk of facing lawsuits for failing to hit those projections. But SPACs actually let you do this! The result is that a lot of companies that couldn’t have gone public via a traditional IPO—because they depend heavily on future growth—are now going public via SPAC because they can now safely provide a picture of that future growth to the public.
So, space is one category of companies that SPACs work pretty well for. Over the past year, we’ve seen a bunch of space companies announce that they’re going public via SPAC, so today I’ll provide a very, very brief write-up of these companies. [Note: I’m not looking at Virgin Galactic because it SPAC’d over a year ago, and you probably know what Virgin Galactic is, anyways 😉]
Rocket Lab. Vertically-integrated space launch company capable of on-demand launch for small satellites. Currently working on a new aircraft that can launch medium-sized payload. Also manufactures satellite components. Generated ~$40m revenue in 2020.
Spire. Collects spaced-based data for maritime, aviation, and weather industries using a proprietary constellation of multi-purpose satellites. Currently has 143 satellites in orbit. Has a software platform that delivers this data to customers as a subscription. Generated ~$36m revenue in 2020.
Satellogic. Manufactures low-cost Earth observation satellites to capture images with really high spatial resolution. Currently has 13 satellites in orbit and can map the entire Earth on a monthly basis but only recently started generating revenue (in 2021). Goal is to have 300 satellites in orbit by 2025 and map Earth on a daily basis.
Redwire. Provider of “space infrastructure” solutions. To be honest, I barely know what this means, but it looks like Redwire manufactures a bunch of hardware stuff for space products (e.g., sensors, cameras, antennas, etc.). Generated > $100m revenue in 2020.
BlackSky. Earth observation. Basically, on-demand satellite imagery.+ AI/ML image analytics + bespoke, advanced satellite development programs for customers. Generated ~$22m in revenue in 2020.
Planet Labs. Again, Earth observation. Satellites to do Earth monitoring, maps, and analytics. The company has over 200 satellites in orbit and bills itself as the “Bloomberg Terminal” for Earth data. Generated ~$96m in subscription revenue in 2020 from 600+ customers.
[The remaining space SPAC companies are those that haven’t generated sustainable revenues to-date. I’ve previously written about this phenomenon here.]
Astra. Small satellite launch provider that has conducted three test launches but won’t conduct its first commercial launch until later this summer. It eventually hopes to do hundreds of launches per year, on-demand.
AST. Satellites that provide global Internet connectivity for mobile phones at broadband speeds. It launched its first satellite in April 2021 but needs 20 satellites to start generating revenue.
Momentus. Another satellite launch provider. However, the company is embroiled in securities fraud litigation with the SEC for lying to investors, and its former CEO is a Russian national with strong ties to the Russian government. So strong, in fact, that CFIUS deemed it a national security concern, prompting him to step down. At the time of the SPAC announcement, Momentus was valued at $1.2bn—now, the valuation has been adjusted downward to about ~$600m.
And, here are some figures:
Figure 1. Overview of Space SPACs. Many companies explicitly used 2023 (or 2024/25) revenue multiple for current valuation.
Figure 2. Revenue Projections for Space SPACs. Note how Astra, AST, and Momentus have the fastest revenue growth and the highest 2025 revenue, even though they are the ones that are pre-revenue.
And some takeaways:
Just because you’re pre-revenue doesn’t mean you can’t command a higher valuation than a post-revenue, post-product company, which I find… interesting…
The three pre-revenue space companies have higher revenue projections than the other post-revenue space companies, which I find… also interesting…
I looked at a bunch of these companies’ investor presentations, and a lot of them are (very explicitly) calculating current valuation as a ~5-10x multiple on future revenue in ‘23 (i.e., 2 years out).
There’s tons of interest in Earth observation. How are companies differentiating themselves here? 🤔 There’s also interest in space launch, although Rocket Lab seems to be leading.
📚 What I’m reading
Amplification and its discontents. (Daphne Keller)
Everything that rises must converge. (Ross Douthat)
Mark in the metaverse. (The Verge)
The California dream is dying. (The Atlantic)