Tight lid (3/23/23)

Happy Thursday. The results from the most recent stage of Mars Madness are in, and Vikings 1 & 2, Pathfinder, Mars Reconnaissance Orbiter, and Mars 2020 are advancing to the next round. Find a link to the next stage of voting right below today’s top stories.

In today's edition...🎨 Hyperspectral recon awards✈️ Virgin Orbit’s new owner?🛰️ $LLAP Q4 results📝 The contract report 

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NRO Taps Industry for Hyperspectral Imaging

The National Reconnaissance Office on Wednesday awarded six companies study contracts for commercial hyperspectral imaging, which can detect changes in satellite images that would be invisible to the human eye. 

"We are operating the largest, most diverse, most capable overhead constellation in NRO's history as we face increasingly complex threats in space and on the ground," NRO Director Chris Scolese said in a statement. "Through these newest contracts, we are very excited to explore the potential of commercial hyperspectral imagery and what it may be able to contribute to our world-class intelligence, surveillance, and reconnaissance capabilities."

Who won? The six companies–a mix of startups and established players in the field–are:

• BlackSky Technology ($BKSY), a geospatial intelligence startup founded in 2014

• HyperSat, a hyperspectral imagery provider based in McLean, Va.

• Orbital Sidekick, a space-based global monitoring company

• Pixxel, an Indian-American hyperspectral constellation operator

• Planet ($PL), an Earth observation company that regularly provides data to the NRO

• Xplore, a space data company that serves commercial and government customers

The details: Each contract will be worth ~$300,000 with an initial six-month base performance period, according to an NRO spokesperson. However, each contract includes two two-year options for extension, bringing them to four years total, with additional options to extend further. 

Lightspeed: NRO tooted its own horn a bit for awarding the contracts just four months after issuing RFPs, representing breakneck speeds for the government. And it does represent a breakneck speed for the government. “These contracts demonstrate our continued commitment to agile acquisition,” said Pete Muend, director of the NRO’s commercial systems program office. “Speed remains vital to take advantage of the innovation coming from industry.”

What’s next? The contracts will be split into two stages:

• The first stage will study the commercial systems and estimate capabilities of both individual sensors and collective constellations. 

• The second stage will focus on “assessing on-orbit capabilities and procuring data products,” per the NRO.

Virgin Orbit Nears Deal to Raise $200M From Texas Investor

In a story that nearly writes itself, a Texas investor is swooping in to save a troubled rocket company just as it was teetering on the brink of bankruptcy.

Dallas-based VC Matthew Brown is set to invest $200M into Virgin Orbit ($VORB), a source told Payload. The news was first reported by Reuters on Wednesday. 

• Brown has 15 years of space venture capital experience, investing over $1B of personal funds in companies like SpaceX, Rocket Lab ($RKLB), and Boom Supersonic.

The terms: Brown is funding the investment out of his family office, with no contributions from Energent, a fund where he also serves as GP. In exchange for the capital injection, Brown will receive a controlling stake in Virgin Orbit. 

The $200M cash infusion couldn’t come at a better time. In January, after a string of four successful launches, Virgin Orbit’s Start Me Up mission experienced a mid-flight failure, resulting in the loss of nine customer payloads. With $VORB’s price in freefall and few funding opportunities, Virgin Orbit’s cash position worsened, eventually leading the company to halt operations and furlough staff last week.  

The upside

A source familiar with Brown’s thinking said the investor sees robust business potential and competitive advantage in Virgin Orbit’s unique air-launch system. 

The capability could enable Virgin Orbit to launch small satellites or national security payloads within hours of notice (in theory). Traditional, vertical launch providers need significantly more lead time, due to pad and ground closure requirements.

• Virgin Orbit's novel launch system involves a modified Boeing 747, nicknamed Cosmic Girl, carrying a LauncherOne rocket to a height of 35,000 ft. 

• The rocket is then released, and its engines are ignited to propel it into orbit. 

Brown is also acquiring a company with a proven track record of achieving orbit and a binding backlog of $143.1M (as of Sept. 2022). Moreover, Virgin Orbit’s total government contracts far exceed the $200M investment, which, according to the source, was a key factor in Brown’s decision to move forward with a deal. 

Operational improvements

As for incoming operational changes, the source said the primary focus would be on keeping a tight lid on spend and ensuring that management is aligned on this goal. For context, Virgin Orbit burned $175M of cash in the first nine months of 2022 on $33M in revenue. 

What’s next? The Goldman and Merrill Lynch brokered $200M deal is expected to close Thursday or Friday. While a date hasn’t been set, there is hope that the company-wide furlough could end as early as this week.

Terran Orbital Triples Revenue

Terran Orbital ($LLAP) saw sales triple in Q4 compared to the prior year, the company revealed Tuesday in fourth-quarter and full-year 2022 financial results. The Q4 breakdown: 

• Revenue of $31.9M, up 197% YoY

• Net Loss of -$33.0M, an 18% annual improvement 

• Cash of $93.6M

• Backlog of $170.8M, up 131% YoY

Full year: Terran generated 2022 sales of $94.2M, driven by a record 19 satellite deliveries (10 were SDA/Lockheed birds). 

Rivada contract: Last month, Terran won the monster $2.4B Rivada job, and is awaiting final approval on the constellation operator’s IT license before production commences.

Cart before the horse: On Tuesday’s earnings call, Terran announced that it was adding 94,000 sq ft of manufacturing capacity in Irvine, CA. The facility will be built next door to the 60,000 sq ft Irvine plant that the company leased just last year. 

Click here to read our full Q4 breakdown online.

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Mars Madness: Final Four 

Vote here on the two Mars missions that will move forward to the final round tomorrow. 

In Other News

• Relativity’s Good Luck, Have Fun mission lifted off at 11:27pm EDT last night. The 3D-printed Terran 1 cleared the tower and passed Max Q with flying colors (and blue flame). The launcher fell short of orbit, with the second-stage engine seemingly failing to generate thrust after stage separation. 

• The Australian military is boosting its space capabilities to support new nuclear submarines promised under the AUKUS deal.

• NASA warned of “devastating” impacts on US space priorities if the agency’s funding is capped at FY22 levels. 

• A confirmation vote on Biden’s pick for the top FAA job has stalled out indefinitely due to GOP concerns about qualifications. 

• 'Oumuamua wasn’t an alien spaceship after all, but a gassy comet leaking hydrogen, according to a new Nature study authored by a UC Berkeley astrochemist and Cornell astronomer. 

• SpaceX’s next round will likely include sizable participation from Saudi and Emirati public investment funds, according to a report in The Information. 

• The producers behind “You Can Call Me Bill,” William Shatner’s documentary, will donate 25% of their revenue from the film to the Space for Humanity nonprofit.