Axiom Space raises $ 130 million and becomes the latest space unicorn

Houston-based Axiom Space is going full steam ahead to boost production from private space stations, while also flying for paying passengers on orbit trips. The company announced $ 130 million in a new round of financing on Tuesday.

“This round allows us to make a big payment in the construction of our [space station] module and allows us to build the team, which we are expanding at a crazy pace, “Axiom President and CEO Michael Suffredini told CNBC.

Although Axiom declined to comment specifically on its valuation, Suffredini said that it has now “passed the point” of becoming a unicorn – meaning that the company’s valuation has exceeded $ 1 billion, placing Axiom among the 10 companies most valuable private space companies in the US.

The increase was led by C5 Capital and joined the Partners Statement (which is supported by David Rubenstein, the co-founder of The Carlyle Group), TQS Advisors, Moelis Dynasty Investments, Washington University in St. Louis, The Venture Collective, Aidenlair Capital , Hemisphere Ventures and Starbridge Venture Capital.

In addition, C5 operating partner and former president of Blue Origin, Rob Meyerson, will serve on Axiom’s board of directors.

“Axiom Space is a force in the space industry and will become a centerpiece of the C5 Capital portfolio and increase our vision for a secure global future,” said Meyerson in a statement.

Suffredini noted that C5 approached Axiom about leading the round in June, but delays in some investors “putting the money together” meant that it took until December to do so. He emphasized that the delays were not caused by “lack of interest”, saying “the market is excited about what we do” – as it clearly fits into an emerging sector of the space industry, while many companies focus on rockets or satellites.

Axiom discussed going public, Suffredini said, especially as SPACs (special purpose acquisition companies) have become an option for space companies looking to raise money. Suffredini expects the company to reconsider the “public versus private” conversation the next time it seeks capital. He added that Axiom has “two to three acquisitions that we will see next year”, while examining ways to add complementary capabilities as the company grows.

Founded in 2016, Axiom has raised $ 150 million to date, with executive chairman Kam Ghaffarian having provided his initial funding through IBX, his family office. Ghaffarian co-founded Axiom with Suffredini, shortly after his retirement, after a decade at NASA as a program manager for the International Space Station.

Piloting a crew of four private astronauts using SpaceX’s Crew Dragon spacecraft is Axiom’s main short-term focus. Called AX-1, the mission is planned to launch in January 2022 and will be the first totally private flight to the ISS.

Axiom plans to make flying astronauts a routine part of its business, with the new funds helping to “make payments for things we need to buy,” said Suffredini.

“We plan to make a few flights a year,” he said.

He explained that the missions, which cost more than $ 200 million each, “really pay” in the long run, with Axiom funds helping to establish a payment plan for its customers and SpaceX.

“Particularly for these flights, where we make payments for certain services and items we do, the customer’s payments are updated and then we pay ourselves back,” said Suffredini.

Axiom’s AX-1 mission will launch former NASA astronaut Michael López-Alegría, real estate investor Larry Connor, Canadian investor Mark Pathy and former Israeli fighter pilot Eytan Stibbe to the space station. López-Alegría is the commander of the spaceship with Connor as a pilot, while Pathy and Stibbe are mission experts.

But Axiom’s focus on space flights extends beyond passenger flight, with the company starting to work on habitable modules that will connect to the ISS, as well as operating on its own in orbit.

“Everyone is building rockets, but no one was building destinations to go,” said Ghaffarian. “Many companies are building trips to space, but where will they go, especially when the International Space Station retires?”

Axiom is looking to double the size of its workforce by the end of this year, with around 110 employees currently. Suffredini says the goal is to reach 1,000 employees by the end of 2024, to fill the new 322,000-square-foot headquarters in his Houston Spaceport building in Ellington Field, near NASA’s Johnson Space Center.

The company will first build an elevated manufacturing bay, similar to the Kennedy Space Center, where ISS modules were built, and then grow from there. Axiom’s headquarters will have assembly areas, a control center, training facilities and even hangars for the jets needed for astronaut training flights.

Given the cost of expanding his ambitions, Suffredini expects Axiom to continue raising money “in the next four years”. But the opportunity he and Ghaffarian see represents “a huge market,” said the latter.

“It’s not just about building a space station, where there is a destination,” said Ghaffarian. “Whether it’s manufacturing, pharmaceuticals, private astronauts or even satellite services, all types of infrastructure as a service are really the model we’re thinking about.”

Suffredini said that Axiom started talking to companies in other sectors, some of which “don’t even realize that microgravity can help them” and others that “do not have access to the ISS”. So far, corporations have conducted surveys on board the ISS, ranging from companies like Procter & Gamble to specialist LambdaVision retinal implants.

“Some aspects that we don’t even think about will be present, just like in the early days of the Internet, when we couldn’t anticipate everything we could do with the Internet,” said Ghaffarian. “We are building a platform where all the [low Earth orbit] economy or space economy can build from. “

But, to put it simply, Ghaffarian said that “successful companies are those that are profitable, otherwise they would not be sustainable”.

Axiom has already started generating revenue for its space stations, with NASA awarding the company a contract to connect a habitable module to the ISS as early as 2024. The seven-year contract has a maximum grant amount of $ 140 million, which Suffredini said which goes beyond development to include the launch and operation of the module, once connected to the space station.

“It is exciting because it is the world’s first commercial space station and we are going to be attached to the ISS,” said Suffredini.

It is an addition that NASA is eagerly awaiting, with the space agency noting that Axiom’s latest fundraising round “is further evidence that NASA’s commercial low Earth orbit strategy is gaining momentum”.

“The capital markets are responding, and many companies have approached NASA to partner with us on our various commercial initiatives for low Earth orbit. We are still in the early stages of transitioning from low Earth orbit from a government-dominated arena to a where the private sector takes the lead, “said Phil McAlister, director of commercial space flight development at NASA, in a statement to CNBC. “There is more work to be done and we will need many companies to succeed in building a sustainable economy in space. But, this is a positive sign.”

Axiom Station modules will help increase the usable and habitable volume of the ISS. Suffredini said that Axiom acquired the parts of its modules that take longer to arrive from the supplies, with “contracts in force with the main suppliers” and “initial design work” concluded.

“The most important part of this acquisition for which we competed and ultimately won was the fact that it wasn’t about how NASA gave enough money to do the development – because if NASA did that, they would end up just having the next space station, “Suffredini said. “If we could win all of our money from the NASA contract, we wouldn’t be working hard to build the market.”

The company then plans to withdraw its Axiom Station modules in late 2028, when the 20-year ISS is due to retire. But if NASA extends the use of the ISS, Suffredini said Axiom Station will remain connected while the company builds other private space stations for free flight.

“The most important part of this concept is that, with everything [happening] at ISS, there is a very smooth transition from the government-owned and operated facility to a commercial facility, “said Suffredini.

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