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Good morning. Today is the 50th anniversary of the signing of the Outer Space Treaty, which entered into force on Oct. 10, 1967, after ratification from the US, Soviet Union, UK, and a few others. 

As the second of the “non-armament” treaties, among other things, the Outer Space Treaty commits signatories to not placing WMDs in orbit. Today, the treaty binds its 100+ state parties to use outer space only for peaceful purposes. 

In today’s (acronym-heavy) newsletter…
🚀 NASA VADR contracts
🎙️ Q&A with CYSEC 
🤝 D-Orbit to SPAC
📝 The contract report

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Fixed Price, Indefinite Delivery and Quantity

Image: NASA

Yesterday, NASA announced it had awarded 12 launch services contracts totaling $300M to support its Venture-Class Acquisition of Dedicated and Rideshare (VADR) missions. The VADR contracts are fixed-price, indefinite delivery agreements with a five-year ordering period.

The biggest names in launch made appearances on the list of awardees: 

  • ABL Space Systems 
  • Astra 
  • Blue Origin 
  • L2 Solutions 
  • Northrop Grumman 
  • Phantom Space Corporation 
  • Relativity Space 
  • Rocket Lab 
  • Spaceflight Inc. 
  • SpaceX 
  • ULA
  • Virgin Orbit

Venture class: NASA is taking steps to make it easier to procure launch services for its science payloads from the private sector. To do that, the agency is taking a page from the commercial launch playbook, allowing for more agile development and flexibility. The contracts reduce the amount of NASA oversight in the launch preparation process, lowering the bill incurred by launch. 

The key points of the VADR contracts, which diverge a bit from standard Launch Services Program (LSP) requirements:

  • A miniaturized version of the mission integration process
  • Commercial interim payments
  • “Protection from commercial industry standard terms and conditions”

Risky? The payloads flying on these lower-oversight partnerships would be NASA’s lower priority missions, which allow for a little more technical flexibility. These launch services would be limited to CubeSats and payloads in Class D, or low-priority, high-risk missions that have significant alternative or re-flight opportunities.

“These tremendously flexible contracts will meet a wide variety of NASA science and technology needs, further enhancing the agency’s Launch Services Program’s reputation as Earth’s bridge to space,” Bradley Smith, director of launch services at NASA HQ, said. 


CYSEC Extends Seed Round

Last week, Switzerland-based CYSEC announced it had extended its seed round by 4M Swiss francs ($4.3M) to 7M Swiss francs (~$7.5M). Founded in 2018, the company creates “confidential computing” products designed to harden highly sensitive data used in clouds, data centers, and at the “edge.” 

The fintech-focused cyber startup plans to use new funds to expand into two target markets: cryptocurrency and edge computing, which includes space. The company participated in ESA’s incubator program, and more recently, launched its first-gen embedded system on SpaceX’s Transporter-3 mission. 

We spoke with Mathieu Bailly, CYSEC’s VP of space, about the trials and tribulations of building end-to-end security systems for new satellites and spacecraft. A few quotes: 

  1. “Historically space engineers have focused on reliability and durability—maximizing the service life of satellites—often at the expense of security.”
  2. “Security should be seen as an enabler to the business case, [not a hindrance]. There is a lot of education to be done in the space market.” 
  3. “So far, only governments have been able to afford the security solutions offered by a handful of historic players…These solutions are lightyears away from being able to fit the needs of smallsat, LEO, new space, and commercial missions, which tend to be a lot less mature in terms of security.”

+ Want more? Check out the full interview on Payload’s website


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New Space SPAC on the Block

Image: D-Orbit. See investor deck here

On the heels of Satellogic ($SATL) completing its reverse merger just this week, another space player is preparing to go public via SPAC.

This morning, D-Orbit announced its intentions to merge with Breeze Holdings Acquisition Corp. (NASDAQ:BREZ). D-Orbit offers “last-mile,” in-space transport services via its ION Satellite Carrier. D-Orbit has used ION in four of its six missions to date. 

Deal details: In Q2 or Q3 2022, the Italian launch services provider will combine with $BREZ, providing D-Orbit a post-deal enterprise value of €1.13B (~$1.28B).

  • Breeze holds $117M cash in trust (which won’t all go to D-Orbit, unless 0% of $BREZ shareholders redeem their shares). The deal is supported by $29M in convertible debt financing from ATW Partners and a $5.5M PIPE. 
  • Breeze and D-Orbit have partnered with the Charles F. Bolden Group, which is led by former NASA Administrator Charles Bolden. 
  • Upon de-SPAC, D-Orbit is expected to trade on the Nasdaq as $DOBT.

In its investor deck, D-Orbit cites its flight heritage (70+ payloads delivered) and traction (40+ “paying customers”). As far as forward-looking projections go, the company says it has a €19M ($21M) revenue backlog, €147M ($164M) of contracts under negotiation, and a €1.1B ($1.23B) “pipeline.” 

  • The proposed deal values D-Orbit at 56.5x expected 2022 sales and 12.2x expected 2023 sales.
  • Reminder: At Payload, we tend to take SPAC projections with a grain of salt. 

Payload’s takeaway: Space SPACs have experienced a volatile year, with most of the cohort trading below their offer price. Plus, mind the macro backdrop. As we wrote earlier this month, “rising interest rates never tend to do tech growth stocks any favors.” Nonetheless, the SPAC option has not fallen out of favor with space companies looking to tap the public markets to support growth and raise money.


In Other News

  • Israel became the 15th nation to sign the Artemis Accords.
  • Astroscale paused its ELSA-d debris removal demonstration due to an anomaly. The company reported that before it paused operations, the client spacecraft had successfully separated from the servicer spacecraft and that the system was working as designed.
  • Comtech Telecommunications rejected a $790M acquisition offer from Acacia Research Corp., saying the offer “grossly undervalues” the company.
  • Celestis will launch a Star Trek tribute on the first flight of ULA’s Vulcan Centaur rocket in the most fitting payload-rocket match we’ve seen yet. Bonus: The mission is called Enterprise.
  • Payload correction: In yesterday’s Term Sheet, we mistakenly wrote that Plus Ultra had raised EUR 5.5M ($6.2M) of venture funding. The space outpost startup reached out to let us know that it is still in the process of raising the round, which has not closed. 

The Contract Report

  • The NRO (National Reconnaissance Office) signed synthetic aperture radar (SAR) development contracts with five companies: ICEYE, Airbus, Capella Space, Umbra Space, and PredaSAR.
  • AGIS (Advanced Ground Information Systems) awarded Kleos Space, a geospatial intelligence company, a data evaluation contract.
  • Phase Four and Orbit Fab signed an MoU to prepare Phase Four’s Maxwell engines for on-orbit refueling.
  • Axiom Space awarded Jacobs the architecture and engineering phase one design contract for its planned Houston spaceport.
  • Xplore signed a contract to purchase Earth observation nanosatellites from OrbAstro. 
  • Elbit Systems was awarded a contract worth ~$16M to supply a space telescope to the Weizmann Institute of Science under Israel’s ultraviolet transient astronomy satellite program.
  • Warpspace has been selected by JAXA to lead an R&D project on space communications for lunar exploration.
  • Stratolaunch signed a research contract with the AFRL to assess the feasibility of hypersonic test flights.
  • The Sultanate of Oman signed an MoU with several companies, including Virgin Orbit, SatRevolution, AI analysis company TUATARA, and Omani emerging tech innovator ETCO, to launch Oman’s first deep space mission.
  • Eutelsat signed a contract with Intersat to provide broadband services in Gambia, Guinea-Bissau, and Senegal.
  • USSF awarded a $49.7 million delivery order on the Starfleet IDIQ contract to L3Harris for development of the Advanced Tracking and Launch Analysis System.