Launchspace Technologies is currently raising at a pre-money valuation of just under $49 million. Considering that the company is in the prototype phase and has very little revenue, it is largely overvalued. Therefore, it receives a low price score.

Although the global space market is sizable — worth $360 billion in 2018 and expected to grow to $558 billion by 2026 — the global space debris monitoring and removal market is much smaller. One source estimated its value at $866.4 million in 2021. It is forecasted to grow at a rate of 7.8% per annum, climbing to just $1.4 billion by 2028. A second source estimates the market is projected to grow at an annual rate of 27.7%, eventually reaching $273.5 million by 2030. Given this small niche the company is playing in, Launchspace Technologies receives a low market score.

Launchspace Technologies CEO and co-founder John Bauman previously worked as the president and CEO of VOD Consulting Services. VOD Consulting focused on intellectual property in several industries, including video on demand, broadband communications, mobile, and advertising. Prior to his time at VOD, Bauman was a business development consultant for Scanbuy. While there, he focused on mobile advertising and promotions, including facilitating mobile engagements across the globe. Bauman also worked as a head of business development for the mobile products division of Top Image Systems, a business technology company. Prior to that, Bauman held high-level positions at various technology companies. His extensive business and product management experience makes him highly qualified to lead Launchspace. 

Launchspace co-founder and CTO Dr. Marshall Kaplan holds a PhD in aeronautics and astronautics from Stanford University. Previously, he was the CEO of Launchspace Services, which provided customized training programs for space professionals. Prior to that, he was a senior spacecraft systems engineer at the Johns Hopkins University Applied Physics Laboratory. While there, he oversaw civil and national security spacecraft systems engineering, including the development of new space sensors. Before that, Kaplan worked as a senior military space adviser for the Institute of Defense Analyses. There, he managed and contributed to studies regarding space, astronautics, missiles, launch vehicles, and other related technologies. He also worked as an international space technology adviser for Spacetech, providing management and technical consulting and training services to clients globally. Finally, he served as a professor of aerospace engineering at Penn State University for more than 13 years. Kaplan’s extensive technical expertise proves he has the experience needed to develop a high-quality sensor for Launchspace Technologies.

The full Launchspace team consists of eight employees, though none mention the company on LinkedIn. The raise page suggests that many are scientists with experience in the aerospace industry. It also appears that many are limited to advisory roles. Once the product reaches commercialization, the founders will need to scale the team, specifically on a sales and marketing or partnerships front. But given the extensive industry experience of the two co-founders, Launchspace receives an above-average team score.

There are already many companies dedicated to space sensor technology and to space debris detection and removal. Examples include OrbitGuardians, ClearSpace, Share My Space, Astroscale, and Obruta. However, Launchspace Technologies claims it can detect much smaller debris — between 1 millimeter and 2 centimeters in size — than the competition. The company also appears to have a unique NASA Space Act agreement for orbital technology. In other words, NASA is providing Launchspace with customized materials for its orbital technology. Should Launchspace’s product work as claimed, it will be highly differentiated. The team has also secured patents to protect the company’s technology and create a defensibility moat in a market that already has high barriers to entry. Overall, Launchspace receives a high differentiation score.

Launchspace Technologies generated zero revenue in 2019. In addition, the company had a net loss of $243,311 and experienced cash outflows of $28,811 on an operating basis. In 2020, the company generated $655,000 in revenue and a net profit of $296,683 — but the revenue came from a $5.2 million in-kind contribution from Airbus. Airbus is providing Launchspace with a contract to test the orbital debris remediation and spacecraft shielding solution on the ISS Bartolomeo for a year. 

Launchspace has also been awarded a $214,500 grant from the Center for the Advancement of Science in Space. But overall, Launchspace’s weak financial track record thus far gives it a low performance score.

Risk associated with an investment in Launchspace Technologies is high. The company is still developing its product, so viability is in question. An unproven product contributes largely to high time and product risk. Market risk is also elevated because of the small market size and the fact that there are other competitors vying for this niche. Funding risk is especially high because Launchspace will likely need significantly more capital to truly become a viable enterprise. Even at the low end, it costs at least $10 million to launch a satellite into space, and that excludes any development costs. A smaller craft might be cheaper, but the company is still looking in the multimillion-dollar range for the development and launch of such a product.

Based on its current traction, Launchspace Technologies seems to be raising at an ambitious valuation for this raise. The true market opportunity for the business looks fairly small and crowded. Though somewhat expected for the industry, financial performance is weak at this stage of development. The nature of the company is very capital and time intensive, so this is unsurprising. Although Launchspace has gained support through partnerships, it will likely need more funding in the future. The company’s product is still under development and therefore untested. Finally, it is unclear whether there will be sufficient demand for Launchspace’s product by the time it is released.

Launchspace Technologies has attractive traction from a non-financial perspective. It has several strategic relationships — most notably, a partnership with NASA. Although product development is still ongoing, Launchspace’s sensor could outperform competitors in locating and controlling small pieces of space debris, as competing solutions typically don’t focus on smaller pieces of debris. The company also has patents strengthening its defensibility. As more satellites are launched, demand is likely to continue growing.

Launchspace Technologies has developed patented solutions to remove orbital debris that pose threats to satellites, astronauts, and the International Space Station. Launchspace’s technology detects, tracks and removes small orbital debris, while other solutions tend to focus only on large debris. 

The company’s current valuation seems excessive, especially taking into consideration its disappointing financial performance so far. The market is small and fairly crowded with competitors. Additionally, Launchspace is rather high-risk and has an unproven product. It is unclear if its technology will prove effective, so it may be some time before investors recoup any capital.

Launchspace has, however, developed strategic relationships with NASA, the Pentagon, and the Space Force. The market is growing at a strong rate. And should Launchspace’s technology work as promised, its solution will be highly differentiated. Additionally, demand for its product is likely to only increase over time as more satellites are launched into orbit. In sum, our team has rated the company a Neutral prospect at this time.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Daniel Jones.