Cosmic Shielding Corporation (CSC) is raising capital through the sale of convertible notes at a valuation cap of $50 million and a 20% discount rate with 4% interest rate. The company has not generated any revenue yet and only has $5,730 in cash. Compared to companies in the same industry that have not generated revenue, CSC’s valuation is quite high. A $50 million valuation is also slightly higher than most other growth stage startups raising capital online. Overall, CSC looks to be overvalued in this funding round. 

The entire space economy has been seeing marked growth over the last decade. In 2020, the global space equipment market was valued at around $369 billion. It is estimated to grow annually by 4.3% and be worth around $497 billion by 2027. In 2019, the global space launch service market was worth $9.88 billion. It’s growing by 15.7% each year, making it worth about $32 billion by 2027. Put together, the growth in these markets implies the demand for space shields will be increasing as well.

The global radiation shielding and monitoring market was worth $58.8 billion in 2019. The market is expected to grow by 4.4% annually to reach $72.9 billion by 2024. Although the radiation shielding and monitoring market size is decent, the market’s growth rate is lower compared to other space-related industries. This lower growth rate could mainly be due to the nature of the business model, as the majority of demand comes from a limited number of companies. However, as space exploration continues, the need for radiation shielding will also continue. CSC is facing a target market that’s decently sized and set to see steady growth in the coming years. 

Cosmic Shielding Corporation (CSC) was founded in 2020 by Yanni Barghouty and Dr. Lembit Sihver, the company’s CEO and CTO respectively. Prior to founding CSC, Barghouty earned a bachelor’s degree in biomedical engineering from Georgia Tech University in 2016. He served for three years as the CEO of Spots Development Group, a home-sharing app designed for college students. Barghouty’s only experience in the space industry is serving briefly as a computer engineering summer intern for NASA in 2011. Although Barghouty appears to have good managerial skills, the CEO’s experience in space technology seems to be lacking. 

Dr. Sihver serves as CSC’s CTO. He obtained a PhD in nuclear chemistry and physics from Uppsala University in 1990. Dr. Sihver has worked as a physicist and radiation scientist for more than eight years and taught nuclear science for a little more than 14 years. He has also worked with the US Naval Research Laboratory and NASA to study the effect of radiation in space. Although Dr. Sihver seems to lack in managerial roles, his university and research experience can contribute significantly to the development of CSC. Together, Barghouty’s management skills and Dr. Sihver’s scientific expertise create a balanced founding team.

CSC’s remaining team consists of a chief revenue officer and two scientists. Both of the scientists work at leading engineering and physics facilities such as the Massachusetts Institute of Technology and NASA. However, other than the founders, the rest of the team does not work full-time at CSC, which could slow the company’s progress. CSC’s team is notably lacking key members focused on marketing and acquiring partnerships. This deficit could affect the company’s progress in the long run.

Overall, the two CSC’s founders balance the experience of each other, bringing together strong scientific and managerial skills. While this is a boon for the company, CSC is otherwise only minimally staffed. It will need to expand its team in order to keep growing business operations.

Although space shielding is not a new concept, many of the existing products are heavy, expensive, high maintenance, and have poor thermal properties. Materials like polyethylene, kevlar, aluminum, and water are often used in these shields. Cosmic Shielding Corporation’s (CSC) Multifunctional Shielding Polymer (MSP) aims to provide adequate shielding against radiation in space and have good thermal properties. At the same time, it is supposed to be lighter than competing products and 15-times stronger than metal. 

CSC’s MSP can be 3D printed to accommodate various applications and needs. CSC is not the only company to provide 3D-printed space technology. Companies such as Made In Space and PolarOnyx have been working with NASA to provide 3D-printed shields that can be used in spacecraft, aircraft, and satellites. However, CSC is still one of the few companies to enter the space shielding market with 3D-printable products. What complements CSC’s shields is its Solar Engine space weather forecasting technology. According to the company, it can predict weather up to two days ahead with more than 95% accuracy. Using Solar Engine together with its unique shields, CSC should be able to provide designs fit for different missions while protecting astronauts from harm. Although competitors are entering the growing space shielding market, CSC’s patented MSP technology coupled with its space forecasting system provides a good level of defensibility.

Cosmic Shielding Corporation (CSC) has not generated any revenue since being founded in 2020. The company is still testing its Multifunctional Shielding Polymer (MSP) shields in concert with NASA and the Massachusetts Institute of Technology. CSC successfully printed its first prototype in August 2021 and has demonstrated the use of its Solar Engine space weather forecasting system. Although CSC does not have paying customers yet, it has signed letters of intent with three space companies and will be doing a pilot with another. 

It is worth mentioning that CSC has also raised $1 million in a past pre-seed round while being part of Seraphim, a space technology accelerator program. However, looking at the company’s financials, the company’s total cash is only $5,370. CSC also has a low monthly burn rate with low debt. Although this could be a good sign for some startups, a space technology company needs to spend heavily on research and development to improve its product. Therefore, CSC’s current financial state could raise some concerns. CSC is expecting to generate revenue in the third quarter of 2023 by selling component shields, but not being able to spend on developing its product early on could delay reaching its goals.

An investment in Cosmic Shielding Corporation (CSC) comes with a moderate risk profile. Although the company has a few letters of intent, it still does not have any paying customers, mainly because the product has not been fully developed for use yet. With no fully developed product, there’s no guarantee that the technology will meet the promises that CSC has set. Additionally, there is also no guarantee of product-market fit for the shield. 

The company’s financials are also an area of concern. CSC has very little in cash on hand and has only raised $1 million in previous funding. Since the company uses a business-to-business sales model, its sales cycle is likely to be long and slow. Long sales cycles means a long time to generate revenue, so it could be years before CSC begins to bring in money. 

Although CSC’s team has experience in space technology and engineering, only the founders are working full-time. It is important for companies with new emerging technologies to have a dedicated team to develop and test the product. Additionally, the company lacks key team members such as a product manager and marketing officer. These roles can be crucial to the success of forming partnerships and acquiring more customer traction. Lastly, CSC admits that its technology is novel and customers might not need the product, especially if they don’t fully understand the nature of electromagnetic radiation. This concern seems to indicate there may not be a high demand for CSC’s product or — as referenced earlier — that product-market fit is not guaranteed.

Cosmic Shield Corporation’s (CSC) success depends on delivering its promises. Its Solar Engine will need to be accurate, and its Multifunctioning Shielding Polymer (MSP) shields should be durable, customizable, and lightweight. If these products fail to deliver the functionality that CSC has promised, it could mean the end of the company.

Once the products are fully developed, CSC will need partnerships or a bigger team and facilities in order to manufacture its MSP shields at scale. It will take a lot of money for the company to build its team and continue with research and development. However, CSC’s current financials and team do not reflect that. The company is short on both money and staff members, and only the founders are dedicated full-time.

It is also important to note that CSC is a young company, and its traction is untested. Although it has signed letter of intents with a few space companies, the clients are not guaranteed to adopt CSC’s technologies. CSC still has a long way to go in proving its products and securing a market niche for itself.

New technologies to improve space travel and exploration are in demand. Although there are other players that are manufacturing space shields, Cosmic Shielding Corporation’s (CSC) patented Multifunctioning Shielding Polymer technology provides a level of defensibility to the company. Even if other competitors emerge, the barrier to entry for space shielding and technology is high because it requires a lot of time, capital, and research to manufacture an effective product. CSC has already put in much of the early hard work that’s needed for a space technology startup.

CSC is also working on making two complementary technologies, a radiation shield for space vehicles and a space weather forecasting system, Solar Engine. This combination makes the company unique compared to other competitors in the market that have only one of either technology. Besides, having both could make clients more likely to use CSC’s services and products. 

CSC lacks in capital, and its team could be more robust. However, it’s important to note that the company was only founded in 2020. It has managed to make great progress in terms of obtaining a patent, developing a prototype and preparing to test it, and signing letters of intent.  Many other startups take longer to show the same progress. CSC’s rapid progress is especially impressive considering how capital- and research-intensive its products are.

Cosmic Shielding Corporation (CSC) is a space technology company that is aiming to mitigate the risk of working and living in space through its Multifunctioning Shielding Polymer (MSP) and Solar Engine forecasting system. MSP shields offer noteworthy versatility and can be produced with a 3D printer. The Solar Engine system is promised to forecast space weather up to two days in advance. CSC intends for these forecasts to be used to customize MSP shields as needed for upcoming space weather events.

Considering the company was only founded in 2020, CSC has a rather high valuation. Although the company does not have any revenue yet, it has developed its product and is beginning to test it. Due to the costly nature of research and testing, a lack of strong capital inflow could hinder the company’s progress. CSC plans to start selling its shields in late 2023, so it may be a while before investors see any returns. Although the market for space shielding is favorable in size, it is growing rather slowly. However, CSC’s MSP technology is patented and therefore defensible, and using it together with the complementary Solar Engine is especially attractive. CSC has a favorably experienced team. However, the team is concerningly small, and only the founders are working at the company full-time. All factors considered, Cosmic Shielding Corporation has been rated as a Neutral Deal at this time.

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Analysis written by Yasmin Sharbaf, October 16, 2021.