Blain’s Morning Porridge – March 4 2021: To the Stars, but Mars first.
“It will free man from his remaining chains, the chains of gravity which still tie him to this plant. It will open to him the gates of heaven.”
This morning: SpaceX remains on course to be one of the most important companies ever, and is driving competition to commercialise space… and the UK budget.
I was thinking about a piece this morning on the consequences and implications of yesterday’s UK budget. But, that would be a bit yawn… (I will mention it below…) To be brutally honest, who wants to read about budgets when there is very little that can beat the excitement of exploding rockets.
Regular porridge readers will know I am not a fan of Elon Musk, but I am massively enthusiastic about the possibilities of the space industry – and SpaceX, much like Tesla was in electric vehicles, is way ahead in the sector. I am something of a Space nerd. I have telescopes, model spaceships, and I read everything I can on the topic. I tell you the names of all the US astronauts and what each mission achieved. I can be excruciatingly boring about Space.
I also reckon Space is a massive commercial opportunity – and if you believe in disruptive tech, then you should be invested. The future is out there…
Yesterday the third prototype SpaceX Starship exploded – but only after successfully completing a high-altitude test flight and returning to the launch pad. If you watch the video it looks like it exploded on launch – but it previously flew to 1o km, descended horizontally before flipping upright to hover into a successful landing. From flames around the vessel as it landed it looked like something was leaking, and 8 minutes after it landed it went kaboom, throwing the ship into the air. They will get it right next time, or the time after that…
The SpaceX Starship is truly extraordinary. When fully tested – and I have no doubt it will be supersuccessful – it will sit atop a Super Heavy Booster, providing capability to launch 10 tonnes into Low Earth Orbit (LEO). Both stages will return to earth and be reusuable, a technology SpaceX has proved with its Falcon rockets which have taken crews to the International Space Station.
Wednesday’s launch was not a 100% success, but Musk can afford it. He’s demonstrated SpaceX tech is on course to revolutionise the commercialisation of space. Unlike EVs, space really is new technology and it’s a fascinating market to examine in terms of disruptive tech, what does and what doesn’t work, and tech adoption.
Space X, is a much, much more important company than Tesla. The EV maker simply improved existing battery and powertrain technology, dressed it up as disruptive innovation, and went on the make itself, briefly, among the most valuable companies on the planet. Now it’s becoming clear Tesla faces enormous competition in the space it’s created. Tesla will survive and no doubt thrive – but it’s unlikely to change the world as conclusively as we once thought.
The history of the aerospace industry is instructive. The Wright Brothers didn’t hang around long and within a few short years there were hundreds of aviation firms.
What’s curious about Space is its very slow commercialisation. If you compare space with aviation it’s a very different timeline. In the first 50 years from Orville and Wilbur’s hop on Kitty Hawk beach, the technology advanced quickly to Mach 2 fighters and the initial designs for Concorde. But in the 60 years following the launch of Sputnik, Space was about long-planned government programmes which ran out of funding when the TV audience thinned out. Apollo, Moon-shots and plans to go to Mars were killed by bureaucratic inertia and being last on the list of budget priorities.
Yet, Space was always monetizable. People talked about communications and space mining. Look at the amounts a few very rich individuals are willing to pay for a seat, or the 600 folk who have paid up for Virgin Galatic tickets? Or what NASA will pay to transport payloads into orbit. Of course, Space is also strategic – and the Military aren’t enthused about the space they need for their spy satellites being filled with space junk or commercial satellites…
Musk sees the commercial value in space very clearly. SpaceX is not just him joyriding and planning his eventual departure to Mars. Musk perceives massive value from SpaceX as the launch system for his Starlink system of over 12000 LEO satellites providing space-based internet to anywhere on the planet. You can get Starlink now – access the net from anywhere for a mere £500 per annum. The costs will come down.
What SpaceX shows is the commercial reality of space. It is monetizable. It will be worth billions.
Aside from the Starlink system, there are a host of other satellites for survey and navigation planned. The UK small-to-medium sized market will be over $5.5 bln over the next 10-years. The UK government has increased the military budget to develop launch capabilities and invested in OneWeb to create our own satellite UK broadband service in the next few years. There is much talk about where the UK’s first Spaceport will be based – I fancy Prestwick.
Last month a new US satellite start up, Astra launched not a rocket, but a SPAC merger which will value the company at $2.1 bln. It hasn’t yet launched a commercial rocket, but achieves its massive valuation from the market to launch satellites. There simply isn’t enough launch capacity. Astra plans to scale up its production facilities and be launching rockets by 2025. The valuation on Virgin Orbital – which has launched one rocket from an old converted B-747 – is in excess of $1 billion.
I am currently funding a UK rocket company – Astraius. Their plans are far more developed and commercial than either Astra or Virgin. Astraius has rights to commercialise existing US military horizontal launch technology to set up a launch facility based in Scotland.
Rather than fixed ground launches, which restrict the potential orbit, the rocket is launched from the back of a C-17 Military Transport, meaning satellites can be inserted into any orbit from anywhere in the world. That’s important, as it costs additional fuel to move a satellite into another orbit if launched from the ground. Moreover, Astraius’ tech that has been proven over 30 US military launches.
The Telegraph carried an article about the commercialisation of space just a few weeks ago: “The budget space race is poised for take-off”. It’s well worth a read.
The deal has support from the Scottish Government to develop Prestwick as a the UK’s first spaceport to marry-up satellites to the rockets, and put them into the plane. It has the advantage of being close to Glasgow, the centre of Europe’s Satellite manufacturing industry. At $45k per kilo, the Astraius proposition to put satellites into LEO is among the cheapest. The firm has already lined up commercial and military orders.
If you want to learn more about Astraius or the current equity raise – drop me an email.
If you just want to talk about space… I’d be delighted!
Meanwhile… The UK Budget
Must we? I suppose we must….
Yesterday’s UK budget has spawned lots of newspaper headlines. It was positive in keeping up the pace of stimulus to boost the UK out of the Corona-recession, but erred towards policy mistake territory by putting an increasing tax burden on individuals and corporations down the line. It was mitigated, to some extent, by tax-breaks on investments. Listening to the head of the UK’s Office for Budget Responsibility on the Transistor Radiogram this morning was mildly positive – the UK is set to recover quickly with lower unemployment than previously expected. There is also going to be a new UK infrastructure bank based in Leeds… wherever that is…
Five things to read this morning
Out of time, and back to the day job…