To the moon: Space startups shoot for SPAC mergers

Recent blank check targets are giving new meaning to the term “moonshot,” as more space-focused startups are choosing to go public via SPAC merger.

Commercial spaceflight represents a burgeoning opportunity, with billionaires like Elon Musk and Jeff Bezos making bold bets on tackling the final frontier. While the area has garnered plenty of interest, space startups have avoided the IPO market for the past decade, opting for private funding. SPACs have changed that dynamic.

Why space-focused firms pick SPACs
Traditional IPO investors are reluctant to award $1+ billion valuations to early stage or pre-revenue companies, but SPAC shareholders have been willing to bet on longshots in the right area. And while IPOs can require a year or more of preparation, SPACs allow space-focused companies to take advantage of current conditions and list in a matter of months.

Six space startups select SPAC listings
The original space SPAC, Richard Branson’s suborbital space tourism company Virgin Galactic (NYSE: SPCE) successfully completed its merger with Chamath Palihapitiya’s first blank check company in October 2019. While the stock has been highly volatile, Virgin Galactic shares last closed 238% above the $10 offer price, an indicator that early-stage space companies can access public markets via SPACs.

Five more space-focused companies are set to follow in Virgin Galactic’s tracks: small launch rocket developers Rocket Lab (pending w/ Vector Acquisition, VACQ) and Astra (Holicity, HOL); orbital transfer vehicle maker Momentus (Stable Road Acquisition, SRAC); and two satellite network developers, telecom-focused AST SpaceMobile (New Providence Acquisition, NPA) and data/analytics provider Spire Global (NavSight Holdings, NSH).

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The article To the moon: Space startups shoot for SPAC mergers originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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