Launchspace Technologies

Early Stage

Protecting Space and the Future $1 Trillion Space Economy

Analytics

Raised to Date: Raised: $329,254

Aggregate Commitments $

Platform

Netcapital

Start Date

09/08/2021

Close Date

04/07/2022

Min. Goal

$10,026

Max. Goal

$1,069,975

Min. Investment

$100

Security Type

Equity - Common

Funding Type

RegCF

Series

Pre-Seed

Price Per Share

$100.26

Pre-Money Valuation

$48,999,970

Rolling Commitments $

Status
Funded
Reporting Date

04/30/2022

Days Remaining
Funded
% of Min. Goal

3,284%

% of Max. Goal

31%

Likelihood of Max
Funded
Avg. Daily Raise

$1,560

Momentum
Funded
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Location

Boca Raton, Florida

Industry

Transportation, Automotive, Aviation, & Aerospace

Tech Sector

EnterpriseTech

Distribution Model

B2B

Margin

Medium

Capital Intensity

High

Business Type

Growth

Launchspace Technologies Corporation, with a valuation of $48.9 million, is raising funds on NetCapital. The company has developed patented solutions to remove orbital debris that pose threats to satellites, astronauts, and the International Space Station. The sensor satellites of Launchspace detect and track small orbital debris and remove them through orbital debris remediation spacecraft. Launchspace Technologies Corporation has strategic relationships with NASA, the Pentagon, and the Space Force. John H Bauman and Marshall H Kaplan founded Launchspace Technologies Corporation in October 2016. The current crowdfunding campaign has a minimum target of $10,000 and a maximum target of $1,069,975. The campaign proceeds will be used for technology manufacturing and testing, notes repayment, patents and legal fees, NASA Space Act Agreement costs, and other expenses.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$655,000

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$296,683

$-243,311

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$254

$692

Accounts Receivable

$0

$0

Total Assets

$655,479

$1,217

Short-Term Debt

$612,000

$254,421

Long-Term Debt

$0

$0

Total Liabilities

$612,000

$254,421

Financials as of: 09/08/2021
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

To date, more than 11,000 satellites have been launched into space. Of these, around 3,000 remain active today. And that’s just the beginning. Estimates suggest that about 100,000 satellites could be in orbit by 2030. 

But while satellites are essential for everything from GPS signals to space exploration, they’re also creating a big problem. The growing number of satellites around the Earth is increasing the amount of space debris in our atmosphere. Space debris needs to be navigated around in order to avoid collisions, hindering space exploration. Small pieces of space debris — between 1 millimeter and 2 centimeters — are expected to increase to more than 1 trillion. But existing space debris removal methods typically don’t tackle smaller pieces of debris. 

That’s where Launchspace Technologies Corporation comes in. Launchspace intends to launch a satellite system that is capable of detecting, tracking and removing small pieces of orbital debris. In addition, the company can detect other threats to satellites in space. The sensor it is developing can track debris and active spacecrafts both in low Earth orbit and between Earth and the moon. Launchspace is working closely with both the US government and commercial players. The company’s initial revenue will likely come from government entities, but it expects that the bulk of its sales will eventually come from the commercial space. 

Launchspace’s current Netcapital raise has been rated a Neutral Deal by the KingsCrowd investment team.

Price

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.

Market

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.

Team

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.

Differentiators

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.

Performance

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.

Risks

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.

Bearish Outlook

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.

Bullish Outlook

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.

Executive Summary

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.

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Launchspace Technologies on NetCapital 2021
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Platform: Netcapital
Security Type: Equity - Common
Valuation: $48,999,970

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