Supply and demand (4/11/23)

Good morning. It’s been two years since our co-founders Mo and Ari made building Payload their full-time jobs. It’s exciting to see how far the Payload team has come—and to think about how far we’re going!

In today's edition...🪆 Russian rocket sanctions🎧 Pathfinder #0042🔀 On the move

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Russian Rocket Sanctions Impact Demand More than Supply

EU sanctions imposed on Russia-owned rocket maker Khrunichev Center will not slow rocket production, but they will impact customer demand, center chief Alexey Varochko said Monday in an interview with TASS.

On Feb 23, the EU passed its 10th round of sanctions on Russia, which included the rocket maker on the list of prohibited entities.

Russian rocket builders: The Khrunichev Center is a Russian-owned launch manufacturer responsible for building the heavy-lift Proton-M and Angara launch vehicles.

• While Russia’s Soyuz rocket focuses on transport to LEO, Proton-M and Angara are designed for heavier payloads and GEO bird deployments.

Supply: According to Varochko, Khrunichev builds its rockets without using any foreign components. The homegrown supply chain, developed through years of sanction pressures, will likely shield the company from manufacturing disruptions.

“Restrictions aimed at the international space activities of the Russian Federation began long before the tenth package of EU sanctions,” Varochko said. “The 10th EU sanctions package added the Khrunichev Center to the list of sanctioned companies, which basically did not change anything.”

Demand wanes: Khrunichev Center is feeling the sting of customers walking away from Russian launch contracts as recent sanctions set in.

“Probably, some of our foreign partners may be afraid of the emergence of so-called secondary sanctions from the EU countries because of business ties with us,” said Varochko.

One such example is South Korea, which pulled out of a contract with Moscow earlier this year after a years-long launch relationship. "Our plans to launch a multipurpose satellite with Russia have entirely gone awry,” South Korea’s Tae-Seog said.

A new era: Varochko reiterated the wind-down of Proton-M production to prioritize the next-gen Angara rockets. Russia is developing a partially reusable Angara rocket, but there is no evidence of significant progress made on the project.

Pathfinder #0042: A future of mass abundance with Karan and Neel Kunjur

A single Starship launching three times per week would be capable of delivering more mass to orbit in a single year than humanity has launched to date. In a post-Starship world, will mass and design constraints change for the space industry? Brothers Karan and Neel Kunjur believe they will.

With their startup K2 Space, the Kunjurs hope to take advantage of a mass-abundant future. The company emerged from stealth last month with an $8.5M seed round co-led by First Round Capital and Republic Capital.

What is K2? The LA-based startup aims to commoditize the large satellite bus manufacturing process. K2 is taking advantage of the anticipated lack of mass constraints in a post-Starship world by designing low-cost, high-capability satellites weighing up to 10 tons apiece with price tags as low as $15M. Until Starship is commercially operational, the company is planning to build a one-ton class for $10M that can be optimized for a Falcon 9 or Falcon Heavy.

K2 aims to sell its buses to science, defense, and commercial customers at affordable prices. The brothers believe they can achieve this price point by trading mass and cost to completely redesign existing systems. To find out more, you’ll have to listen to the full conversation.

A sneak peek at our conversation

Today, the Pathfinder podcast brings on its first sibling/cofounder duo. Before founding K2, CEO Karan spent a decade at Boston Consulting Group and helped lead Text IQ, an artificial intelligence company, through to a nine-figure exit. CTO Neel spent 6 years at SpaceX developing avionics systems for the Dragon spacecraft and then went on to become a senior electrical systems engineer at electric aircraft company Kittyhawk.

Mo, Neel, and Karan discuss:

• K2’s origin story

• Optimizing satellites for mass-scale

• Will the future be a mass-abundant world?

• Applications for large-scale satellites

• The significance of Starship

• The Kardashev Scale–how far can civilization go?

• And much more…

Pathfinder #0042 is live now…

…listen or watch now on YouTube, Apple, Spotify, or desktop. And reply to this email to let us know what you think!

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In Other News

• SpaceX's Transporter-7 launch was delayed until no earlier than 2:48am ET tomorrow.

• Starship launch may slip to the end of the third week of April, i.e., 4/20, per Elon.

• Canada intends to spend Can$1.2B ($890M) to build a lunar vehicle to support human exploration.

• ULA has begun pre-flight testing of the Artemis II ICPS-2 upper stage.

• The Netherlands, Austria, and Italy joined a US-led pledge not to conduct destructive ASAT tests.

• Reuters has a deep-dive on how the Virgin Orbit deal came together and then fell apart.

• Startups still want to mine the cosmos, despite challenges.

The View from Space

Mauna Loa’s eruption last fall in Hawaii was included in a video ESA shared on Monday of 13 volcanoes as seen from space.