Endless (2/6/23)

Good morning. Let's kick this Monday off with a short poem: 

Good night stars✨Good night Moon 🌚 Good night Chinese spy balloon🎈

In today's edition...🗺️ Seraphim ecosystem🤖 $IPAX → $LUNR?🗓️ The week ahead

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Mapping the Space Ecosystem

Seraphim, a leading space VC, has published its 2023 market map, detailing the state of innovation in the in-space economy with an eye on the year ahead.

“As the in-space economy takes off, major players in the industry are positioning themselves to capture a slice of the burgeoning market,” Seraphim VP Maureen Laverty said in a press release. “The possibilities are endless, and the potential for returns is astronomical.”

Keep an eye out: Seraphim identified a few major areas where it expects to see innovation rolling and funding flowing in the coming year. Those areas include, in order of the size of the pool of companies competing as identified by Seraphim:

1. In-space services 

2. Space infrastructure

3. Lunar technologies

4. In-space R&D and manufacturing

5. Crewed spaceflight 

6. Space exploration and utilization

Service, please: Far and away the largest area of growth is in-space services, which aid satellites “by providing transport, communication, life extension, situational awareness, or removing debris.” 

• “This is driven by the explosion in the number of satellites launched, many of which will require ongoing support and maintenance,” reads the press release. 

• “In-space communications feature almost every major GEO satellite operator or LEO constellation, as these companies aim to provide the replacement for NASA’s deep space communications system.”

And the state of competition for in-space services is certainly healthy. Seraphim identified 19 companies working on orbital transfer vehicles (OTVs), which carry customer satellites to their intended destinations to better leverage the cheaper costs of rideshares. 

Debris removal and space situational awareness (SSA) companies should also see increased demand in the coming year, as the growing space economy increases concerns about safety and traffic management in orbit. Eight companies are working on active debris removal technology, including Astroscale, ClearSpace, and Altius, with familiar names focused on SSA.

Build a backbone: Space infrastructure rings in second in the state of competition. Anyone building a space station, capsule for in-space manufacturing or R&D, spaceplane, or power generator falls into this category. 

To the Moon: As NASA makes its way back to the Moon, the space industry is also devoting more attention to the potential for a bustling lunar economy. In particular, the primes and more established players in space, including Northrop Grumman, Boeing, Blue Origin, and SpaceX, are working to enable this new area of industry. 

A Publicly Listed Lunar Company? 

This week, shareholders are set to vote on Intuitive Machines’s reverse merger with Inflection Point Acquisition Corp ($IPAX), a Nasdaq-listed SPAC. If investors vote to approve the de-SPAC, the combined entity will be listed under the new ticker symbol $LUNR. 

SPAC facts, at a glance: Intuitive Machines, headquartered in Houston, announced its intentions to go public last September. The company expects the transaction to generate $331M in gross proceeds and grant the combined entity an enterprise value of ~$817M. 

The business: The company has received three CLPS contracts, with NASA clearly being its anchor customer. Intuitive Machines reports $369M in bookings and a contracted backlog of ~$188M. In its Dec. 2022 investor deck, Intuitive Machines management points to a revenue ramp and a total addressable market (TAM) that for all intents and purposes is still theoretical. 

• Intuitive Machines made $8M in 2018, $20M in 2019, $44M in 2020, and $73M in 2021. 

• The company anticipates making $88M in 2022 (revised downward from a $102M estimate given last September), $300M in 2023, and $759M the subsequent year. 

• Big, if true…from 2021 to 2024, Intuitive Machines’ revenue projections would represent a CAGR of 119%. 

• Intuitive Machines says it’s targeting a three- to five-year gross margin of 52%, and expects to generate “positive cash flow” in 2025. 

The breakdown: Intuitive Machines’s business is split up among four divisions: 

1. lunar access services

2. lunar data services

3. orbital services

4. space products and services

#1 is the most mature and “proven” segment, responsible for 92% of expected 2022 revenues. By 2024, though, Intuitive Machines expects lunar access services to be just ~37% of the revenue mix ($279M), with lunar data services at 14% ($106M), orbital services at 17% ($129M), and space products and services at 32% ($246M).

• Reading between the lines (and charts), #1 represents a solid pipeline for Intuitive Machines in the years ahead. 

• The other segments, though, require execution on #1 (i.e., the lunar landers have to land) and bigger leaps of faith for investors. 

What to watch for: Assuming the de-SPAC receives investors’ blessing in Wednesday’s vote, we’ll then want to watch the redemption rate—or percentage of shares redeemed by SPAC investors prior to a merger closing. We’ll also want to see how $LUNR trades; $IPAX was trading at $9.11 as of press time. Finally, of course, we’ll keep close tabs on the company’s IM-1 mission, set to launch in the first half of this year and take the express route to the Moon. 

+ While we’re here: This morning, Intuitive Machines said that NASA has redirected the IM-1 landing site to the lunar South Pole region.

In Other News

• Samsung’s new Galaxy S23 flagship phones won’t feature emergency SMS via satellite. 

• South Korea remanifested the KOMPSAT-6 satellite from the Russian Angara rocket to Vega C. 

• Freeform emerged from stealth last week. Founded by SpaceX vets, the Hawthorne startup aims to create autonomous printing factories.

• Starlink is now available in Italy. 

• ChatGPT can’t do rocket science, which should be welcome news for many of you.

The View from Space

Planet recently captured this stunning low-angle image of the Himalayas. You can see Mount Everest in the back. Not too shabby...