Aerospace Industry Update
Sign up for myFT Daily Digest and be the first to learn about the aerospace industry news.
Porsche SE, the family holding company that controls Volkswagen, is investing in Munich-based rocket startup Isar Aerospace to ensure access to new space technologies.
The company, together with HV Capital and the banking group Lombard Odier, injected US$75 million, bringing the total funding of the second phase to US$165 million, and the group’s valuation is approximately US$550 million.
Isar is one of several European startups Try to compete Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin provide low-cost satellite launch services for low-Earth orbit.
Lutz Meschke, a Porsche SE executive in charge of investment management, said: “We believe that cost-effective and flexible space access will become a key driver for innovation in traditional industries and disruptive new technologies and business models.”
Existing investors include Airbus Ventures, Earlybird Venture Capital and Lakestar. Since its establishment in 2018, the group has raised a total of US$180 million.
Isar will also make life more challenging for the European launch company Arianespace, which has been struggling to cope with the delays of its next-generation rocket, Ariane 6.
Although much cheaper than previous generations of Ariane rockets, the latest launch version will still be more expensive than SpaceX’s reusable rockets.
Ariana SpaceCo-owned by French aerospace company Airbus and Safran, it has traditionally been the preferred service provider of European space agencies.
But in May, Isar was given the task of launching two satellites into orbit for the German government, becoming the first private European company to win a contract with the European National Space Agency.
Airbus, which has invested in Isar since 2019, also signed a contract with Isar to launch Earth observation satellites.
Isar’s goal is a launch price of US$10,000 per kilogram, which is still much higher than SpaceX.
However, Daniel Metzler, one of the three co-founders and CEO of Isar, said that this compares with the cost of launching small satellites in Europe, which averages more than US$40,000 per kilogram.
As the manufacturing industry matures and more contracts are obtained, Isar is also committed to lowering prices.
He said the rocket has a payload capacity of up to one ton and can carry multiple satellites.
However, Isar has not launched a satellite into space. The company started producing Spectrum rockets this year and will soon begin engine testing in Sweden. The first flight will be launched in Norway in the summer of 2022.
Metzler said that the latest round of financing will enable Isar to expand the production scale of the Spectrum rocket, which relies heavily on automation and 3D printing to reduce production costs. The team also intends to use the funds to start the development of reusable launch vehicles.
“We want to play a leading role in reusability in Europe,” Metzler said.
He added that Porsche SE’s investment signifies that people are increasingly aware that space will change traditional industries such as the automotive industry.
“Today’s car is more like a gadget and iPhone. They are becoming more and more software-centric, so the question is which applications you can run on the car.
“For example, satellite constellations can tell you if there is a parking space. The possibility of space is a very, very big driving force in the automotive industry.”