Blue Origin seeks to raise $10B from external investors in first VC-led funding round

Jeff Bezos’s rocket company Blue Origin Enterprises LP is reportedly looking to raise money from outside investors for the first time in more than two decades.

The company is in talks to secure $10 billion from venture capitalists in a round that would value it at more than $130 billion, according to a report by the New York Times. It’s believed that Coatue Management will be the lead investor in the round with a commitment of $4 billion, while Bezos will contribute around $2 billion of his own funds. The remainder will be provided by a group of unnamed “large institutional investors,” the report added.

The proposed round has not come out of the blue. In May, Bezos told CNBC in an interview that Blue Origin was looking to raise money from outside investors for the first time since it was founded 25 years ago. Until now, the Amazon.com Inc. founder has self-funded the company entirely by himself after selling some of his shares in the online retail and public cloud infrastructure giant, which has grown to become one of the world’s most valuable companies.

“It’s a good time, actually, to start thinking about the future and bring on some other outside investors,” Bezos said in May.

The $130 billion valuation would make Blue Origin one of the most valuable pure-play space companies, exceeding that of many aerospace companies, including Lockheed Martin Corp., which currently has a market capitalization of $121.7 billion. It would also be around $50 billion shy of Boeing Co.’s $180 billion market cap.

Of course, Blue Origin will still be far less valuable than its biggest competitor in the space industry. Elon Musk’s SpaceX Corp. recently became one of the world’s most valuable companies after raising $86 billion through its initial public offering, pushing its market cap well beyond the $1 trillion mark.

Nonetheless, the round would far exceed anything that has previously been raised by a pure-play space company. The biggest round so far was Stoke Space Technologies Inc.’s Series D fundraise, which was bumped up to $860 million in February following an extension. The Chinese reusable rocket company Beijing Interstellar Glory Space Technology Ltd., known as iSpace, was not far behind, raising $729 million that same month. Those rounds pale in comparison with Blue Origin’s proposed fundraise.

If Blue Origin does announce the round soon, it would likely be seen as a huge vote of confidence, both in the company itself and the broader space economy, coming in the wake of a serious setback that occurred in May. Blue Origin was preparing for the fourth test launch of its new New Glenn space rocket, only for it to explode on its launchpad in Cape Canaveral in Florida. Experts said at the time it could set back Bezos’ company many months, considering that when SpaceX’s Falcon 9 rocket exploded on its launchpad in 2016, it took more than 12 months to repair the damage at that facility.

However, Blue Origin Chief Executive Dave Limp said that though the company is still investigating what went wrong in that launch, he believes New Glenn will be able to fly again before the end of the year. He explained that some parts of the launchpad are still in “good shape” and that the company doesn’t intend to rebuild the same launch pad. Instead, it will employ a new configuration that should enable it to reduce the time between launches significantly.

Blue Origin had issues before that launch, though. On New Glenn’s third mission, which aimed to send AST SpaceMobile’s BlueBird 7 satellite into low-Earth orbit, it failed to reach a high enough altitude for that vehicle to sustain its operations, and it was ultimately deorbited.

New Glenn is critical to Blue Origin’s future plans. The rocket has been designed to deliver both cargo and human payloads to the surface of the moon on behalf of the National Aeronautics and Space Administration and other commercial entities. A number of satellite companies are also counting on the rocket to become fully operational and provide them with an alternative to SpaceX’s Falcon and Starship rockets.

“There’s no better guarantee of quality services than a strong competitor, and with SpaceX currently being the only viable option for many companies wanting to put payloads into orbit, Blue Origin’s funding round is great news,” said Holger Mueller, an analyst with Constellation Research. “That’s why everyone interested in space should be hoping for Blue Origin to succeed, so Elon Musk can face a bit of competition and not have a monopoly on satellites and space-based data centers.”

Blue Origin has its own commercial space operations, having recently announced two mega-constellation projects that aim to put thousands of satellites into orbit around the Earth. These include the TeraWave Internet constellation that will provide high-speed connectivity to enterprise customers from low- and medium-Earth orbit, as well as Project Sunrise, which aims to put 51,600 satellites into a sun-synchronous orbit at altitudes of between 500 and 1,800 kilometers.

Photo: Blue Origin