Investment

Space, the final frontier – and stellar opportunity – for family office investing

Space-cargo pioneer Momentus is the latest of a growing number of outer space ventures to win family office support to achieve take-off. 

It expects to inject itself into a SPAC provided by Ed Freedman’s Stable Road Capital family office. Other backers include Dakin Sloss’ Prime Movers Lab, US sports star Joe Montana and property man Ted Lerner.

The number of launches is literally set to skyrocket. Elon Musk alone has talked of operating 40,000 satellites for his Starlink broadband service

A record $3.5 billion was invested in space infrastructure in the nine months to September, higher than the whole of 2019, according to Space Capital, which invests in the sector. 

The space economy will grow from $415 billion to $1.4 trillion by 2030, according to Momentus. Stable Road investment chief Brian Kabot reckons space growth will easily exceed life on earth. 

Momentus sees the great potential in helping private companies and government agencies launch low-orbit satellites for data, broadband and other services, including defence.

According to Bloomberg, 9,600 satellites have been launched since 1957, mainly in low orbit. There are also 34,000 fragments larger than 10 centimetres. The number of launches is literally set to skyrocket. Elon Musk alone has talked of operating 40,000 satellites for his Starlink broadband service. 

Blue Origin, run by Jeff Bezos, also plans a broad brand programme. Early his year China launched a Galaxy-1 satellite with one gigabit per second transmission potential and plans hundreds more.

Indian billionaire Sunil Mittal is backing the OneWeb satellite programme which the UK Government agreed to rescue early this year. Iceye of Finland raised $87 million for a low-orbital service this autumn. 

Momentus can hope to win business from these, and other, satellite operators seeking to piggyback on missions on the SpaceX Falcon 9 rocket, and others, using increasingly small satellites.

When Falcon 9 unloads its satellites, clients can hire Momentus for “last mile” delivery to ferry them to a required location using a cargo vehicle.

Momentus has called its cargo vehicle Vigoride which relies for propulsion on water plasma jets. The first model is due to be launched at the end of 2020, with four or five to follow in 2021. Larger cargo vehicles are planned for higher, and lunar, orbits.

As well as putting satellites in the right position, there is scope for Momentus to help the removal of space junk which is starting to interfere with low orbit flights. It believes it can extend the mechanical life of satellites and, one day, extract minerals from Solar System asteroids.

The company was founded by Mikhail Kokorich, born in Siberia in 1976. Skilled in maths, he became fascinated with space exploration, starting in 2011 as co-founder of Russian aerospace firm Dauria. 

He later moved to the US, where he saw potential in low-earth satellite launches. Fred Kennedy, a former air force colonel and White House space adviser, has become Momentus president. 

Momentus has signed a contract with SpaceX, Lockheed Martin and Nasa, and expects to sign more, taking advantage of a monopoly position in delivering cargo.

At inception, the company was backed by Y Combinator.  It then attracted the attention of Prime Mover Labs, an incubator firm led by Dakin Sloss.

Prime Mover has backed a string of eye-catching projects including electric planes, carbon capture energy storage and Covid-19 vaccination firm Covaxx.

Joe Lonsdale (Addepar and Palantir) Bill Ackman (Pershing Square) are among a wealth of backers.

Stable Road is led by chief executive Ed Freedman, who founded Total Merchant Services in 1996 to provide credit card processing for smaller companies.  TMS was sold to North American Bancard in 2017.

Stable Road seeks to target capital preservation, current yield and risk-adjusted total returns.  But it also likes cutting edge opportunities. 

Earlier this year it issued a SPAC to take advantage of opportunities in the cannabis industry. 

Once it has merged with Stable Road’s SPAC Momentus will be able to draw on cash worth $310 million. Its enterprise value will be $1.2 billion.

Joe Montana and his son Nate have invested in Momentus through liquid2VC. Ted Lerner’s family is using Lerner Enterprises. 

Other new investors include social media star Tony Robbins; Tribe Capital, and the University of Wyoming Foundation, whose self-professed aim is to inspire “big thinking” and “bold ideas.”

Elsewhere, SpaceX has raised $1.9 billion in the VC market this year. Jeff Bezos is selling Amazon stock to invest $1 billion in Blue Origin.  Microsoft has revealed plans for satellite transmissions.  

Relativity Space, run by Tim Ellis, has raised $185 million from wealthy investors and expects to launch a rocket next year. 

Richard Branson used a SPAC for his $1.9 billion Virgin Galactic stock market debut a year ago. It has lately defied sceptics and seen its share price double to $23. UBS analysts say it can rise another 50% in a year, due to its dominant position in space tourism.

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