Sierra Space Reaches $4.5 Billion Valuation After $1.4 Billion Raise
Sierra Space’s mission to bring affordable space transportation to the mainstream is one step closer to reality. In November 2021, the startup raised $1.4 billion from a group of high-profile investors. They included General Atlantic, Coatue Management, Blackrock, Moore Strategic Ventures, the Vincent Viola family offices, and Stan Druckenmiller. As a result, the startup now has a $4.5 billion valuation.
Based in Louisville, Colorado, the company plans to allocate the funding round proceeds to its development projects. The company is focusing on developing two major projects: the Dream Chaser and the Orbital Reef space station.
Near-Space Development Projects in the Works
The Dream Chaser is a family of spacecraft products, each with a specialized purpose. The cargo version is targeting a launch to the International Space Station (ISS) for NASA at the end of 2022. The second version, a crewed variant, will launch in 2025 and will be able to carry 7 passengers and cargo. Finally, the company is developing a third version for national security missions.
The Orbital Reef station is a collaboration with Jeff Bezos’ Blue Origin. Orbital Reef will operate as a “mixed use business park” in orbit. It will support the needs of businesses, tourists, researchers, and commerce. The plan is to build a series of habitation modules with vehicle ports and amenities for a broad customer base. This would result in a hub of economic activity in space. Boeing, Genesis Engineering Solutions, and Arizona State University are providing other supporting services and expertise for the Orbital Reef project.
“The Orbital Reef represents the next evolution of the commercial space paradigm by creating the first ever crewed private sector platform in low Earth orbit. The Orbital Reef will carry forward the singular legacy of the ISS, supporting innovative microgravity research, development, and manufacturing activities which will advance fields as diverse as communications and biotechnology,” stated Mike Gold, an Executive Vice President at Redwire Space, an infrastructure technology company.
A Grand Vision for Space Tourism
Tom Vice, the CEO of Sierra Space, has a grand vision for the future of space transportation. “I envision a day where people are flying up on a Dream Chaser, they’re docking to either a hotel or condominium building on orbit, spending three days or five days with their family, and then returning back again to a port of their choosing,” stated Vice.
Vice noted that the company aspires to be a leader in the space tourism industry. “Our real focus at Sierra Space is to become the largest real estate developer in space,” said Vice. The company envisions luxury hotels and property developments. In the future, Vice predicts space travel will be a competing alternative to other popular vacation destination options like pristine beaches, ski resorts, and theme parks.
Collaboration with the ISS
Sierra is currently a private company. It is a subsidiary of Sierra Nevada Corporation, a private aerospace contractor. At this point, Sierra Space would prefer to grow as a privately held company. However, the company’s leadership is open to exploring a move to go public in the next couple years.
Due in part to a contract scored with NASA, Sierra Space is predicted to generate $400 million in revenues in 2021. The ISS is preparing for the launch of the Dream Chaser spacecraft, planned for late 2022. Docking ports are being set up for the Dream Chaser spaceplanes, designed to provide the ISS with cargo delivery and disposal services.
Significant Capital Investments Mean a Long Road to Profitability
Investors acknowledge that the necessary equipment and transportation startups require significant capital investments up front and that it could be a long road to becoming profitable. Bill Ford, Chairman and CEO of prominent growth equity firm General Atlantic commented, “Space is a capital-intensive business, and we see something special here. We’re very excited about the opportunity to commercialize the low-Earth orbit.” General Atlantic invested $400 million as part of the latest funding round.
The Sierra Nevada Corporation is owned by Chairwoman and President Eren Ozmen and CEO Faith Ozmen. The husband-wife power couple believe their company has a robust strategy to become a leading player in the space race. The Sierra Nevada Corporation has a team of over 4,000 employees in the United States, England, Germany, and Turkey.
Other such companies vying to pioneer the future of space transportation and commercial activity include Astra Space, Redwire Space, Momentus, Rocket Lab USA, Satellogic, and Virgin Orbit. The space economy is currently valued at roughly $350 billion. Morgan Stanley predicts that the industry could grow to more than $1 trillion by 2040.