Peter Beck on Rocket Lab's IPO, Space SPACs & Neutron Rocket

A Lifelong Fascination with Space

Peter Beck’s earliest recollection involves standing outdoors with his father in Invercargill, New Zealand. They were gazing at the night sky, and his father suggested the possibility of intelligent life existing on planets around distant stars, potentially observing Earth in return.

This concept, as Beck recounted at the Space Generation Fusion Forum (SGFF), proved profoundly impactful. “It was a truly astonishing idea for a young child, and it became firmly fixed in my mind,” he stated, “effectively setting my future course towards a career within the space sector.”

From Apprentice to Rocket Pioneer

Looking back, Beck acknowledges the remarkable consistency of his professional trajectory. Rather than pursuing higher education immediately, he chose to enter a trade, becoming a tool-making apprentice.

Simultaneously, he dedicated his evenings to amateur rocket engine construction. He expressed gratitude for the support he received throughout his career. “I was incredibly lucky that the organizations I collaborated with, both companies and governmental bodies, either actively supported or, at the very least, permitted my use of their resources for personal projects during off-hours.”

The Founding of Rocket Lab

This dedication and dual commitment ultimately led to a significant breakthrough. In 2006, Beck established Rocket Lab, his own space launch company.

Following fifteen years of operation and twenty-one successful launches, the company achieved a major milestone. It became a publicly traded entity through a merger with a special purpose acquisition company (SPAC), securing an additional $777 million in funding.

This influx of capital is intended to bolster Rocket Lab’s capabilities and further its ambitions within the rapidly evolving space industry.

The Surge in Space Industry SPACs

Rocket Lab experienced a significant increase in its valuation, reaching $4.8 billion following its merger with Vector Acquisition. This positions the company as the second most valuable space launch provider, trailing only SpaceX, led by Elon Musk.

SPACs (Special Purpose Acquisition Companies) have emerged as a favored method for space-focused businesses to become publicly listed, allowing them to secure substantial funding.

Alternative Routes to Public Markets

Several competitors, including Virgin Orbit and Astra, have also initiated public trading through SPAC mergers. Furthermore, other companies within the space sector, such as Redwire, Planet, and Satellogic, have utilized this approach to access capital markets.

Beck shared with TechCrunch that a public listing had been a long-term objective for Rocket Lab. While an initial public offering (IPO) was initially considered, the SPAC route offered greater assurance regarding both capital acquisition and valuation.

Projected Revenue Growth

Investor presentations preceding the SPAC merger indicated optimistic projections for Rocket Lab’s financial performance. The company forecasts revenues of $749 million in 2025, with expectations of exceeding $1 billion in the subsequent year.

In comparison, Rocket Lab reported revenues of $48 million in 2019 and $33 million in 2020, and anticipates approximately $69 million in revenue for the current year.

Caution Regarding Pre-Revenue Companies

Despite the enthusiasm surrounding space SPACs, Beck expressed reservations about startups lacking revenue or those struggling to secure private funding utilizing SPACs as a financial solution.

He stated, “A number of space SPACs have emerged, and the quality varies considerably – some represent a last resort for companies unable to raise capital privately. This isn’t a sound basis for becoming a public entity.”

Industry Consolidation Anticipated

Although the space industry currently features a competitive landscape, with companies like Rocket Lab and SpaceX deploying payloads and numerous new players entering the market, Beck predicts a period of consolidation.

“Investors will quickly discern which companies are successfully delivering results and which are merely aspiring to do so,” he explained. “The current environment is characterized by considerable excitement, but ultimately, execution is paramount in this industry and within the public markets.

The distinction between successful ventures and those that fall short will become apparent very rapidly.”

From Electron to Neutron

Rocket Lab has primarily generated revenue through the small payload launch sector, where it has established a prominent position utilizing its Electron rocket. Measuring just 59 feet in height and a mere four feet in diameter, Electron is considerably smaller than many contemporary rockets destined for space.

The company operates launch facilities at two locations: its privately-owned launch complex on the Mahia Peninsula in New Zealand, and a launch platform at NASA’s Wallops Island facility in Virginia, though the latter has not yet hosted a Rocket Lab launch.

Currently, Rocket Lab is working to make Electron’s first-stage booster reusable. A new system involving atmospheric reentry and ocean splashdown, employing a parachute to decelerate the booster, is being implemented. The eventual aim is to recover the booster mid-air using a helicopter.

To date, Rocket Lab and SpaceX have largely defined this market segment, but this situation may soon evolve. Both Astra and Relativity are actively developing small launch vehicles; Astra’s newest rocket stands approximately 40 feet tall, while Relativity’s Terran 1 falls between the size of Electron and the Falcon 9, reaching 115 feet in height.

Consequently, Rocket Lab’s decision to broaden its capabilities to encompass medium-lift rocketry with the anticipated Neutron launch vehicle is logical. Details surrounding Neutron have been carefully guarded – Beck indicated to attendees that even released renderings are not entirely accurate – but it is projected to exceed Electron’s height by a significant margin and be capable of delivering around 8,000 kilograms to low-Earth orbit.

As explained to TechCrunch, “We observe considerable imitation of our work within the industry.” Beck continued, stating that Rocket Lab prefers to advance further in development before revealing its innovations.

Rocket Lab projects that Electron and Neutron combined will be able to launch 98% of all satellites predicted to be launched through 2029, potentially eliminating the need for a dedicated heavy-lift rocket.

Alongside Neutron, the company is also pioneering spacecraft development. Named Photon, it is envisioned as a versatile “satellite platform” designed for seamless integration with the Electron rocket. Several Photon missions are already planned, including a journey to lunar orbit for NASA’s Cislunar Autonomous Positioning System Technology Operations and Navigation Experiment (CAPSTONE) program.

Furthermore, two Photons have been chosen for an 11-month mission to Mars, and Beck has discussed future plans for a probe to explore the atmosphere of Venus using a Photon satellite.

Expanding beyond Photon, Rocket Lab has secured a contract with space manufacturing startup Varda Space Industries to construct a spacecraft for launch in both 2023 and 2024.

Neutron is being engineered to be human-rated from the outset, meaning it will adhere to the necessary safety standards for transporting astronauts. Beck expressed confidence in the “democratization of spaceflight” and Rocket Lab’s intention to be a key provider of this service. When questioned about potential expansion into building other spacecraft, such as landers or crew capsules, Beck remained noncommittal.

“One should never completely rule anything out,” he stated. “This is the most important lesson I’ve learned throughout my career as a space company CEO.”