Blue Origin, Lockheed Martin leaders believe a new space age is almost hereOctober 2, 2019 View comment (1)
SAN FRANCISCO—When it comes to the fundamental problem of developing a successful space company, Blue Origin chief executive Bob Smith (pictured above) likes to talk about his boss' other business.
In creating Amazon, Jeff Bezos was able to take advantage of several notable existing technologies. Blue Origin and many other space-focused startups like it, on the other hand, are essentially starting from scratch.
"What Amazon was able to do is build on infrastructure that already existed," Smith said on Wednesday morning in a conference-opening talk at TechCrunch Disrupt. "They didn't have to invent the internet. [They] didn't have to invent the credit card, they didn't have to invent the personal computer."
But by now, Blue Origin has been around for nearly 20 years, building various rocket systems and launch vehicles that can ferry satellites—and soon, perhaps, human beings—into the stars. Other companies in the space sector are doing the same. The infrastructure for a viable space ecosystem is beginning to come together. And that could mean that private investors' interest in space startups is only just beginning.
"Once you actually have that access to space that's routine and capable and cheap, all those business plans start coming off the shelf," Smith said. "And that's what you're seeing now. That's why there's so much private equity actually coming in the space industry, because people are recognizing, 'Oh, that cost curve is shifting, and it's shifting quickly. And I can actually get some first-mover advantage by investing into space now.'"
More and more venture capitalists seem to be taking notice. Global VC investment value in the space tech vertical has increased exponentially over the past decade, from just $2.6 million in 2011 to a new high of $1.8 billion in 2017, per PitchBook data.
Recent days and months have brought a series of notable fundings. Earlier this week, Relativity Space, which builds 3D-printed rockets used to launch small satellites, raised $140 million in Series C funding from an investor list that includes Tribe Capital, Social Capital, Mary Meeker's Bond, and Mark Cuban. In the final week of September, a startup called Spire Global announced $40 million in new backing to help fund its network of weather-tracking satellites. And in July, a rocketry startup called ABL Space Systems received a new strategic investment from Lockheed Martin Ventures.
That latter deal was part of an increased focus at Lockheed Martin on investing in startups, according to Lisa Callahan, a VP in the aerospace & defense giant's space division who was another industry leader at Disrupt on Wednesday that weighed in on the future of space. Last year, the company's Lockheed Martin Ventures unit announced a $100 million addition to its main venture fund, bringing its total amount of available VC to $200 million.
"[We] are really looking to try to help accelerate some of these startup companies because they've got key technologies that we need, that maybe are used here on Earth, but we want to apply them into a space environment as well," Callahan said. "We've got investment in small satellite companies and small launch companies. And we're continuing to work in a mentoring way, as well as in a financial way, with these companies."
It's an example of the first-mover advantage that Smith mentioned. Callahan also noted that the Lockheed Martin Ventures unit could "absolutely" be an acquisition funnel for the company.
During the 1960s, when the US was committing a significant portion of its total GDP toward space exploration, a chorus of critics argued that those billions of dollars could be much better spent closer to home. Similar arguments still exist today. But Callahan isn't buying them.
America's prior decades of space research have yielded a bounty of products—ranging from GPS systems to memory foam to wireless headsets—that have improved life here on Earth. Callahan believes that the emergence of more startups exploring more new technologies in the sector will lead to a continuing windfall of knowledge back home.
"For every dollar you spend in space, the benefit is exponentially bigger here on Earth," she said.
Both Blue Origin and Lockheed Martin are involved in numerous major ongoing efforts in space. Blue Origin plans to soon launch its first manned mission, and the company is targeting 2021 for its first commercial launch. Lockheed Martin, meanwhile, is a key contributor to NASA's Artemis program, which is attempting to return humans to the moon by 2024.
On Wednesday, though, Callahan and Smith expressed differing visions for the space industry's future.
"All of it is to benefit what we do here on Earth, right?" Callahan said. "The more we can learn about our solar system, the more it can benefit us. … What do we need to be doing to protect this planet? Because we owe that to future generations."
Smith, on the other hand, echoed Bezos' longtime ambitions of using Blue Origin's technology to take humanity beyond the earth, rather than just making improvements to our current home. The CEO told the Disrupt crowd about futurist thinker Gerard O'Neill and his idea of massive colonies elsewhere in the solar system that could be much more habitable than living on Mars, the moon or other possibilities for extraterrestrial existence.
The colonies would be located at earth radius to the sun, Smith said, "so that you can actually go back home. Because everybody's still going to want to come back to the old country. That's going to be a very appealing vision."
More appealing, perhaps, would be working toward a future where humans don't have to ponder the prospect of fleeing their planetary home. But either way, the continuing creation of a new ecosystem in the skies is opening new doors for startups and established industry powers alike.
"We're on the brink of a new space age," Callahan said.
Image of Bob Smith via Steve Jennings for TechCrunch.
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