“The two options looked like going to work at NASA or going to work with a large corporation that was fulfilling space contracts with the government — a Boeing, a Lockheed or Northrup,” said the partner at San Francisco-based Founders Fund.
Then Elon Musk founded Space Exploration Technologies Corp. — SpaceX — and Nolan became its first intern in 2003. The internship turned into a full-time gig developing reusable Dragon capsules at SpaceX and working on rocket propulsion, giving Nolan — who now invests in space startups — a front-row seat for the “New Space” race.
Musk’s Southern California company, which raised $1 billion early this year from Google and others at a $10 billion valuation, dramatically cut the cost of launching a space mission from $1 billion down to tens of millions.
It is now the poster child for New Space — a group of venture-backed companies that promise to open up space to private investment in a way that was unthinkable 10 years ago and could dramatically cut the cost of launches even further.
Industry analyst NewSpace Global estimates there are now 900 companies involved in the commercialization of space, up from 125 when it started following the sector in 2011. The firm figures more than $10 billion in private money has been invested.
“Historically, investing in space has been viewed like a Viking burial for one’s money,“ said NewSpace Global CEO Dick “Rocket” David. “You put your money in a rocket, you set it on fire and you sent it into space, never to be seen again.”
The success of SpaceX and Google’s acquisition of Skybox Imaging Inc., a Mountain View satellite startup, for $500 million changed that perception.
SpaceX has raised the most private funding by far, but two satellite developers from the Bay Area are No. 2 and No. 3 on the list of the best-funded New Space companies.
They are San Francisco-based satellite startups Planet Labs Inc., which has raised $183 million, and Spire Global Inc., which has raised $26.5 million. A growing number of others are now sprouting in the region, many of them near NASA Ames Research Center at Moffett Field in Mountain View.
“Now is the time to invest in space,” said Sunil Nagaraj, a vice president at Bessemer Venture Partners whose focus includes the sector. “A new window of opportunity has opened that has been closed for many years.”
While many VCs investing in the sector are lifelong space enthusiasts, Spire CEO Peter Platzer said that isn’t why they are backing companies like his.
“I don’t think anybody is investing in space companies,” he said. “I think people are investing in highly proprietary data and data analytics and one of the areas where you can generate that is from space. That’s what people are investing in.”
And it is profitable, according to Steve Jurvetson, the co-founder of Draper Fisher Jurvetson who is on SpaceX’s board and led his firm’s early investment in Planet Labs.
“Both companies are doing spectacularly well, and the prospect is they will do even better,” Jurvetson said. “There is a fellow board member I won’t name who is a veteran old school industrial investor who looked at the numbers for SpaceX and joked, ‘This is like investor porn.’”
While SpaceX, Planet Labs and Spire have generated plenty of attention because of the large amounts of money they have attracted, there are plenty of others in the Bay Area worth paying attention to.
Investment research firm CB Insights reports that SpaceX and Planet Labs were among 21 New Space companies funded by venture investors in the first five months of this year. That has already eclipsed the record set last year of 20 investments in the sector.
Here are four other new space startups worth watching in Silicon Valley.
Founder and CEO Nadir Bagaveyev says he wants to “democratize space” with his Half Moon Bay startup that is developing 3-D-printed rocket engines. It launched its first test successfully in April.
“We will open up space to Silicon Valley startups,” said Bagaveyev, who took Bagaveev Corp. through two Silicon Valley accelerator programs — Adam Draper’s Boost VC program in Menlo Park and the prestigious Y Combinator program in Mountain View — after moving here from the Mojave Desert in Southern California.
“Sending a satellite into space has been a process that meant piggy-backing on a government or big commercial rocket, and that can take two years or so,” he said. “With us, a startup can get their idea on a rocket at 10 percent to 15 percent of the cost and do it in a matter of months. Innovation in space such as communications, data, new materials, all will be available just like any Silicon Valley idea.”
Bagaveev is close to closing on extended seed funding, Bagaveyev said, and is shooting to begin commercial launches in 18 to 24 months. When that happens, he expects to expand his workforce to more than 100 from the four it has now.
That isn’t the end of Bagaveyev’s space vision, either. Next up on his business plan is to build a small robotic space station in a few years and then a two-man rocket in seven to 10 years.
Naveen Jain’s Mountain View company is competing for the Google Lunar XPrize, aiming to be the first private company to successfully land a robot on the moon’s surface, travel at least 500 meters and then transmit images back to Earth.
“We are absolutely on track to do it next year but the deadline has been shifted to 2017, so we may take our time and do other things that are going to be amazing businesses,” said co-founder and chairman Jain.
One of those is building an unmanned space shuttle that NASA has contracted with Moon Express to do. The shuttle is expected to launch on one of the space agency’s rockets in October 2016, pick up a payload from the International Space Station and deliver it to a land location on Earth.
“It is a kind of glider,” Jain said. NASA is taking the Moon Express shuttle to the space station in exchange for all of the mission data collected. “The idea for them is to see whether they could build or have us build something that could land on Mars or other planetary bodies.”
Jain said his 45-person company has raised about $30 million of the $50 million to $55 million he projects his lunar landing to cost: “That compares to $2 billion that has been spent to reach the moon in the past.”
DEEP SPACE INDUSTRIES
This is another company operating out of NASA Ames in Mountain View, but its goal is very different.
CEO Daniel Faber plans to mine mineral-rich asteroids near Earth for materials that can be used in space for propellants and as feed stock for 3-D printing. “We don’t plan to bring what we mine back to Earth. We did a lot of research into where the best markets for the materials we find will be and concluded that our best opportunity is in space.”
Faber doesn’t expect the actual mining to start for 10 to 12 years, which he said is in line with how long it can take to start a mining operation on Earth.
In the meantime, Deep Space Industries is lining up customers for the vehicles it is building.
“We are building a platform for other people to build their businesses on,” he said. “We can’t imagine what are going to be the best businesses. If I knew what they might do, we wouldn’t have to engage with entrepreneurs and we could do it ourselves.”
One of the first customers is bitcoin core developer Jeff Garzik’s Dunvegan Space Systems. It plans to launch a series of tiny satellites that would broadcast the bitcoin block chain from space. The plan is for the BitSats to provide security and a backup in space in case the bitcoin network on Earth fails.
MADE IN SPACE
The first 3-D printer on the International Space Station was made by another boot-strapped space startup at NASA’s Ames Research Center.
Made In Space hopes the wrench made by astronauts in December with its historic device will open the door to a host of other uses in the future.
“Space exploration until now has been like a camping trip,” said co-founder and Chief Technology Officer Jason Dunn. “We take everything we need with us and if something goes wrong, we have to get it from Earth or go back home.”
Made In Space’s 3-D printing will allow astronauts to make what they need, when they need it. But it is also sending another printer to the space station that will open commercial possibilities, as well.
“It will be available for use by anybody on the planet,” Dunn said. That means that businesses and scientists on earth will be able to pay to make things on the new printer that can then be sent back to Earth via shuttle or used in space.
“With our printer, if you want to fly something into the International Space Station, you will be able to do it in a matter of hours,” Dunn said, instead of the months or years that it has taken until now. “This opens up a very disruptive new way of getting things into space.”
For a photo gallery showcasing the companies listed above, please click here.
This article originally appeared in the Silicon Valley Business Journal. The original article can be found here.