Three fishhooks for Rocket Lab’s $6b listing
on its pending debut on the Nasdaq. In future, it’s possible he’ll get his claws out. The relatively mildmannered Beck will have to decide if and how to engage in the battle for the hearts and minds of institutional and retail investors.
To some degree, Rocket Lab should be sheltered by being on the top tier. Big customers, including Nasa, which has awarded contracts to SpaceX, Astra and Rocket Lab, know it’s best to nurture several players to foster innovation and competition.
And while Beck is kindlier and gentler in nature, his company also takes customers in a warmer embrace. With technologies including its Photon, the CEO says Rocket Lab is the only fully-integrated space transportation company. It can design a satellite for a customer, if need be, and take care of everything related to getting it to orbit — allowing the client to focus purely on an Earth-imaging camera or whatever type of technology they’re trying to get into space.
And only Rocket Lab has launchpads both north and south of the equator. Some US government clients have demanded a Virginia launch, Beck says, but the empty, less regulated NZ skies actually offer a cheaper and easier path to orbit.
3 More American, more military
Kiwis’ hearts swelled earlier this week as Beck described Neutron’s potential to ferry cargo — including people — to the International Space Station, or even the Moon or Mars. But the first point about the Neutron in the investor presentation is that it will be “Tailored for commercial and DoD [US Department of Defence] constellation launches.”
And one of the pillars of Rocket Lab’s bullish revenue forecast is that the US Department of Defence is “focused on space infrastructure”.
As a young company, Rocket Lab received breakthrough funding from the US military research wing Darpa. The first launch from its new launchpad in Virginia (and its first on US soil) will be for the US Air Force — a frequent client, along with US military surveillance agencies.
The Neutron will first blast off from the US. Launch Complex 1 in Mahia is too small to accommodate it — although Beck said later launches from NZ are possible, and that the majority of his company’s staff (currently on a hiring drive towards around 700) will remain based in NZ — even if Rocket Lab moved its corporate headquarters, and most of its engine manufacturing, to California after Lockheed Martin arrived as a major investor in 2015.
Beck has always emphasised that Rocket Lab launches dual-use, research-based satellites for the US military, with manifests approved by NZ’s space agency. But could a new rocket “tailored to the DoD” provoke any PR problems for the soon-to-be-public company?
On Tuesday, Beck got a taste of possible PR flak to come when he was asked, “Is there any payload you wouldn’t carry?”
“We’ve been very clear from the beginning that weapons are an absolute no-go,” Beck said, adding that all Rocket Lab cargo is approved by both the NZ Space Agency and regulators in the US. Will that be enough for big investment funds coming under increasing ethical investment pressure?
So far, at least, it’s been clear skies on that front with both NZ’s ACC and the Australian Government’s Future Fund onboard as Rocket Lab investors ahead of its Nasdaq listing later this year. ACC has not said how much it chipped in, but it bought in during 2017 when Rocket Lab had a US$1b valuation — meaning the Crown insurer’s investment wing is in line to quadruple its money.