Sierra Space Raises $1.4 Billion in Its Series A Funding Round

While it’s easy to focus on giants like SpaceX and Blue Origin, the private aerospace industry is buzzing with several upstart companies. Several of them don’t necessarily compete on the level of the giants, but they’ve been making waves in their own right.

Sierra Space Raises $1.4 Billion in Its Series A Funding Round

Sierra Space, a Colorado-based commercial space company, recently got off the mark in a big way as it hit a major fundraising milestone.

Slowly but Steadily Making a Name

This month, Sierra Space announced it had raised $1.4 billion in its first funding round. The company, a subsidiary of the Sierra Nevada Corporation (a private aerospace contractor), was able to score funds from several high-profile investors - including BlackRock, General Atlantic, AEG Industrial Partners, Coatue, and Moore Strategic Ventures.

With the new fundraising completed, Sierra Space has seen its valuation jump to $4.5 billion. Bill Ford, General Atlantic’s chairman, explained in a statement that the company and other investors understand the value of a thriving organization in the growing aerospace industry. He pointed out:

“The company has harnessed advanced technologies and a culture of innovation to develop products that have transformative potential, and that position Sierra Space as an emerging leader in the new space age. We look forward to providing active partnership to Sierra Space and its management team to accelerate its growth and magnify its global impact.”

Interestingly, Sierra Space almost didn’t go this way.

In an interview with CNBC, Tom Vice, the company’s head, explained they had considered different options before deciding to stick with a Series A. These included listing with a special purpose acquisition company (SPAC). However, the company decided to keep its business private and move with investors who understand its long-term, high-growth plans.

With the funds raised, Sierra Space is hoping to finance most of its projects for the next year or two. The company said it will use about 60 percent of the money raised to work on Dream Chaser - a lifting vehicle that will help move cargo to the International Space Station (ISS).

Sierra Space hopes to complete the Dream Chaser project by the end of next year, projecting it will be able to run tests and conduct flights as early as 2025.

Besides Dream Chaser, Sierra Space is also working on building a version of the vehicle that could serve the military. Vice didn’t point out how Dream Chaser will differ from its military-facing counterpart, but he explained that the latter’s build and development will depend primarily on the country’s national security needs.

A Place on the Orbital Reef

Sierra has also been active in the space industry, landing collaborations with several top players. When Blue Origin announced its Orbital Reef project, it confirmed Sierra Space would be one of the companies to collaborate.

The Orbital Reef is Blue Origin’s answer to the ISS. Blue Origin believes it could make the next best substitute with the latter expected to be decommissioned in less than five years. Orbital Reef will be open to individuals, governments, and companies looking to own a piece of real estate in space.

Sierra Space plans to power the Orbital Reef with its Large Integrated Flexible Environment (LIFE) module. Also, its Dream Chaser vehicle will help with crew and cargo movements.

Blue Origin believes it could have a working version of the Orbital Reef between 2025 and 2030 - just in time for Dream Chaser to launch and be fully functional.

Partnering with Blue Origin will undoubtedly be a huge boost to Sierra Space. The company is already becoming a big name in its own right, but competing with giants in the private aerospace industry might not be possible right now. Regardless, it could simply partner with one to boost its profile.

That doesn’t mean the Orbital Reef is ready. While NASA is reportedly considering private companies’ proposals for replacements to the ISS, the agency remains in a cash crunch. If Congress doesn’t fund its ambitions, it will need to pick one or two companies to deliver what it needs.

The last time NASA had a big contract on the table, it was for its human lander system. The agency had planned to award the contract to two companies, but SpaceX eventually won it.

One of NASA’s reasons was that SpaceX had asked for the least amount of money in its proposal. The company had requested $2.9 billion, while Blue Origin asked for about twice that amount.

Blue Origin didn’t work alone at that point. It had partnered with several other companies, many of which had the incentive to drive prices up and make profits.

If Blue Origin ends up bringing too many companies on board for the Orbital Reef project, the company could face the same fate. For now, however, plans seem to be in place for Sierra Space’s rise to prominence.


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