Dusseldorf, Berlin, Frankfurt The first rocket launch is still pending, but the German aerospace start-up Isar Aerospace already wants to invest heavily in additional production capacity: “In the long term, we want to build one rocket a week,” says company boss Daniel Metzler in an interview with the Handelsblatt.
His company is now raising another 155 million euros for this, as Isar Aerospace announced on Tuesday. The money comes from the Israeli family office 7 Industries, the venture capital company of the Free State of Bavaria and existing investors. The company does not talk about the valuation, it should be around 800 million euros under typical conditions.
Since it was founded in 2018, a total of around 305 million euros in venture capital has flowed into the company. This makes Isar Aerospace currently the best-financed rocket start-up in Europe. Whether it is also the first to fly remains to be seen.
The 300-employee company from Ottobrunn near Munich is in a race with Rocket Factory from Augsburg, a start-up from the OHB Group. Both want to bring their rockets to the launch site and then satellites into low earth orbit (LEO) by the end of the year.
“Access to space is the key to innovation, technological development and security,” says Isar boss Metzler: “already today and even more so in the future.”
Great demand for rocket launches
The European Space Agency ESA is also following the two young companies closely. Because while space travel is becoming increasingly important for many industries and areas of life, Europe is running out of rockets. Without help from the US, European nations may soon be unable to launch civilian or military satellites into orbit.
The boss of the Munich rocket start-up Isar Aerospace has collected 155 million euros from investors.
One reason for this is the consequences of the war in Ukraine. “In 2020/2021, more than half of all rocket launches from Europe were carried out with Russian rockets, that all stopped a year ago and everything has to be compensated for,” says Metzler. In addition, the small European launch vehicle Vega-C was partly produced in Ukraine.
At the same time, the demand for satellite launches is increasing rapidly. Existing investor Porsche SE observes this in the car industry, for example: satellite networks are “an important component for the reliable networking of vehicles and vehicle fleets,” said a spokesman for the Handelsblatt.
Possible applications included data transmission in the field of infotainment, software updates, safety and emergency call functions as well as driver assistance functions and applications in the field of autonomous driving.
According to his own statements, Isar boss Metzler has already signed contracts with customers for ten flights. After the first flight, further rockets should be able to be launched quickly.
Here in Ottobrunn near Munich, employees of Isar Aerospace assemble the two-stage launch vehicle “Spectrum”.
At some point, he’s sure, Isar Aerospace will launch rockets every week. And he is preparing his company for this. A new factory is to be built in the Munich area with the money from the new round of financing. In addition, the company relies on automation and in-house production in order to be less dependent on suppliers.
Metzler also counters that with critics who point to the high level of capital consumption on the Isar. Analysts from Capitol Momentum and European Spaceflight, for example, made the comparison that Elon Musk and his space company SpaceX had significantly less venture capital available until the Falcon One was first launched in 2009: According to the Crunchbase database, it was only $178 million.
“We’re already thinking about the entire industrialization,” says Metzler. “SpaceX only did that more than ten years after the first flight.”
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The strategy sounds risky, but investors like Hendrik Brandis from venture capitalist Earlybird are going along with it. There is such a strong demand for launch services and capacities that there is no need to worry about capacity utilization and margins. “This market is like the market for a cancer drug: if the rocket flies, it will be busy for the next few decades,” says Brandis.
Ambitious schedule: The “Spectrum” is scheduled to start at the end of the year
And the company is working on this with an ambitious schedule. According to experts, after the last tests of a rocket, there is still a year to go before launch. Isar Aerospace hasn’t even finished testing, but still wants to get on the launch pad this year, which the company is building with the Norwegian government on the island of Andoya.
The so-called “hot-fire tests”, in which the engines are ignited and gradually connected to other systems, are particularly important before a rocket is launched. The next major challenge will be the so-called Integrated Stage Testing, in which the fully integrated first stage is to be tested on the launch pad and the fully integrated second stage on the company’s test bench, says Metzler.
He is confident that lengthy changes will no longer be necessary after that: The company has continuously tested hardware, electronics and software from the start and already has a large database.
Before the rocket can be launched onto the launch pad, the engine must be subjected to lengthy “hot fire” tests.
(Photo: Isar Aerospace)
Nevertheless, everyone around the company assumes that the first rocket will explode quite quickly – that’s standard in rocket development. Investor Brandis, who himself has a doctorate in aerospace engineering, is unconcerned. “Non-rocket technologists attach a much higher risk than is warranted to the question of whether the missile will fly or not,” he says.
It is an 80-year-old technology that has been tried and tested. It is true that interpretation errors could occur during development. But: “Then the thing explodes. Then you correct that and then the rocket flies the next time or at the latest the next time,” says Brandis
Isar Aerospace is now fully financed until the end of 2025 or beginning of 2026, assuming that flight tests will be started again and again, says Brandis. Every false start is likely to cost several million euros, and it gets expensive especially if the launching device breaks.
Metzler therefore has a big goal for the test flight: “Don’t blow up the pad,” he calls it: “As long as we don’t blow up the launchpad, the first launch is a success for me.”
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