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Global Founders Capital, the Berlin-based early stage VC firm with close ties to the German startup factory Rocket Internet, is going to become the venture arm of Rocket Internet.
The VC previously raised two $1 billion funds and, just a few years ago, its name appeared in dozens of deals per year. But then, things quietened down. Now we know why: Going forward, it’ll exclusively invest from Rocket Internet’s balance sheet.
Last year the Financial Times reported that Global Founders Capital was in the middle of a big strategic shift. A couple of weeks ago the VC firm reached out to TechCrunch to confirm the pivot and discuss the reasons behind the shift.
“To be transparent, there have been quite a few changes at Global Founders Capital in recent years — in terms of the structure of the fund and the composition of the team,” Global Founders Capital Partner David Sainteff (pictured above) told us.
Sainteff said the firm decided it’s not the right time to raise another fund because it’s not a great time to invest as they do not believe there are that many good opportunities that meet the firm’s criteria and that they don’t need more capital to remain competitive against other investors for deals.
Global Founders Capital was originally structured as a traditional VC firm with several limited partners participating in funds. With its first fund, it backed then-future unicorns such as Personio, Revolut and SumUp. With its second fund, the firm invested in several companies TechCrunch has also covered, such as Pennylane, Ankorstore and Seyna.
Prior to joining Global Founders Capital, seven years ago, Sainteff worked for Rocket Internet which was an investor in Global Founders Capital from the beginning. So there have been close ties between them since the beginning.
“Following the deployment of this second fund, we decided not to raise another fund. Instead, we’ll use Rocket Internet’s capital,” he confirmed. “We have €300 million to deploy for venture investments on the balance sheet. We don’t have any fundraising planned.”
Frankly, this is a bit odd as the firm’s past performance seems quite good. According to Sainteff, the first fund is going to generate returns between 3x and 4x. “For the second fund, it’s far too early [to say],” he continued. “But we have a few clear winners like Pennylane. We entered at the pre-seed stage and the company is worth over €1 billion.”
The new strategy means Global Founders Capital is now much smaller than it used to be, with only five partners left: Fabricio Pettena, Don Stalter, Cedric Asselman, Sainteff and of course Rocket Internet co-founder and CEO Oliver Samwer.
The new version of the firm will also only focus on early stage investments, plus the ability for follow-on investments in later rounds (Series A, B, C, etc).
Did Global Founders Capital choose not to raise a third fund because it didn’t get enough support from potential limited partners or because of the current tech downturn compared to 2021 (with the exception of the boom in artificial intelligence)? Probably the decision hinged on a bit of both.
“It wasn’t the best moment to raise funds with [limited partners],” Sainteff told us. “We think it was difficult to have the imperative to deploy capital.”
“It’s an easy decision to make when you have €300 million in the bank,” he added. “If other VC firms were in the same boat, they would have made the same decision. We don’t rule out the possibility to raise a fund when the conditions are right and favorable.”
For now, the pivot reverses much of the fund’s earlier expansion, when it scaled into more geographies, tech areas and funding stages and the Global Founders Capital name was attached to a bunch of deals.
Hello and welcome back to TechCrunch Space. I hope everyone had a great time at Space Symposium! Hopefully I’ll see you there next year.
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The Space Force has contracted out its next “responsive space” mission, and this one is a doozy. The two awardees, Rocket Lab and startup True Anomaly, will each build and launch spacecraft that will conduct rendezvous and proximity operations on orbit.
In the Space Force’s words: “The vendors will exercise a realistic threat response scenario in an on-orbit space domain awareness demonstration called Victus Haze.”
The two companies will have to operate under intentionally tight time frames, too — the first responsive space mission from Firefly Aerospace and Millennium Space set new records in terms of launch readiness — so we’ll definitely follow this mission closely when it launches next year.
Image Credits: Sam Toms and Simon Moffatt
Confidential financial statements from SpaceX for 2018 and 2019 capture an early glimpse at the degree to which the company is likely dependent on its Starlink business unit, and bringing the Starship rocket online, to become cash flow positive.
While the comprehensive balance sheets are five years old, they provide an intimate look inside the operations of arguably one of the most important, and secretive, private companies in the U.S.
Image Credits: Michael Gonzalez / Getty Images
I was very interested to see this reporting from Bloomberg on Starlink’s profitability — or not. It’s a really nice complement to my scoop above: Taken together, the two stories tell a tale about the importance of Starlink as a revenue-driver for the company’s longer term, and considerably ambitious, plans to colonize Mars.
How many is too many? Starlink dishes in a line on a Celebrity Cruises ship. Image Credits: Celebrity Cruises
Houston, we have a problem…
This week’s space history segment is dedicated to the Apollo 13 mission, which launched on April 11 and returned to Earth on April 17. The three-person crew was destined for the moon, but those plans were swiftly put to an end when an oxygen tank in the service module ruptured two days after launch.
The prime recovery ship for the Apollo 13 mission hoists the Command Module aboard the ship. Image Credits: NASA / Getty Images
Footage obtained by TechCrunch shows the catastrophic ending that Astra’s Rocket 3.0 suffered during prelaunch testing in March 2020.
The explosion, which occurred at Alaska’s Pacific Spaceport Complex, was simply reported as an “anomaly” at the time, an industry term for pretty much any issue that deviates from the expected outcome.
“I can confirm we had an anomaly on the launch pad,” Alaska Aerospace CEO Mark Lester told local reporters at the time. “We are executing our emergency checklist. We request everyone stay clear of the area to allow our crew to address the situation.”
Meanwhile, Astra CEO Chris Kemp told TechCrunch at the time that the rocket “suffered an anomaly following an otherwise successful day of testing in Kodiak in preparation for a launch this week.” He added that the company’s hardware “was the only thing harmed.” He told a separate publication that the company would not be attempting a launch after that week, and that it would “wait until conditions with coronavirus improve before making another attempt” — when in actuality, there was no longer a rocket to launch.
The video clip shows the micro launcher burst into flames. It’s clear the vehicle did not survive. It would have been Astra’s third orbital launch attempt.
At the time, Astra was taking such failures in stride. When the company emerged from stealth earlier that year, it did so with a conviction that it could build rockets at such a high volume, and at such a low price, that some amount of failure could be priced in: 100% reliability was not the end goal. That’s how Kemp summed it up in a May 2022 interview: “The expectation I think that a lot of people have is every launch has to be perfect,” he said. “I think what Astra has to do, really, is we have to have so many launches nobody thinks about it anymore.”
Astra went on to reach orbit for the first time in November 2021, and a second time in March 2022.
Astra had been one of the biggest success stories for space industry investors, with the startup going public in July 2021 at a $2.1 billion valuation after raising nearly $500 million for its ultra-low-cost launch plans. But those plans failed to materialize, and after months of burning cash, Astra’s board quietly accepted a take-private deal from Kemp and CTO Adam London at a stock price of just $0.50 per share. The deal is expected to close sometime this quarter, at which time Astra will cease trading on the Nasdaq.
Astra did not return a request for comment on the 2020 launch failure.
Despite the space industry’s incredible growth over the past 10 years, there are still few places in the United States dedicated to testing rocket and spacecraft engines. This isn’t a problem for large companies like SpaceX and Blue Origin, which can afford to build their own, but almost everyone else is stuck with long wait times and high costs.
Agile Space Industries is looking to change that. Founder Daudi Barnes started the company in 2019 to augment the work of his previous company, Advanced Mobile Propulsion Test (AMPT). AMPT provided hypergolic engine testing, but as Agile, the company has expanded into propulsion systems, thrusters, rocket engines, and ground support equipment.
The Colorado-based startup already operates one test stand, called Sunshine, which AMPT stood up in 2010. Last week, it inaugurated a second stand, called Animas — the only commercial facility capable of vacuum testing hypergolic engines more than 300 pounds and up to 6,000 pounds of thrust, the company says.
“The market is just really, really expanding really fast right now,” Animas project manager Graham Dudley explained. “The barrier to entry for rocket engines has gotten lower, so there’s a lot of people in that game. For testing though? It’s really, really hard to do.”
Animas is designed for modularity, so it can be used for test campaigns ranging from early prototype testing to qualification and acceptance testing. The stand is built on skids, in pieces that can be moved or replaced out, so Agile can handle whatever kind of test it (or a customer) needs.
Engine testing provides the company an additional revenue stream, offering services to other space ventures while also enabling quicker in-house engine development.
Image Credits: Agile Space Industries
“Being able to have easy access to testing earlier in your programs is really helpful,” Agile’s lead test engineer Mesa Hollinbeck said. “We’ve run into several programs, back when we were AMPT, that got really far into their design before they actually hot fired [the engine], and it didn’t work. So they’ve had four plus years of design and development that they have to reboot on, and that’s really, really expensive and hard for your schedule prediction. So having access to testing early is definitely a problem for a lot of the industry.”
Vacuum testing is especially important for in-space propulsion systems, because that test is specifically designed to simulate the space environment. But this is resource-intensive, Hollinbeck said: “A lot of smaller NewSpace companies, it’s just really expensive to put that infrastructure in and they don’t want to make that investment. They want to spend their money in other places. It’s somewhat easy to make a cool hot fire video of an engine in the desert with your really cheap test stand, but to get actual data that allows you to fly your equipment — it’s a higher level of sophistication.”
Owning the test bed means that Agile engineers have access to ample data on their systems. It’s a competitive edge in the space propulsion market, which has become increasingly crowded as the cost to launch spacecraft to orbit has dropped. Many engines fire for the first time on orbit, but that could change as more high-profile, costly missions head to the moon and deep space.
Dudley said that some of the external requests for testing that Agile has received indicated “a concern from multiple organizations that there is not enough testing of the engines that are going into some of the missions that they’re supporting, and that it’s putting those missions at risk.”
“We are hearing that directly, that the reason they want to come to us is because they’re concerned that if they can’t find testing, it’ll increase the risk profile for their missions, and it’s unacceptable for them going forward.”
Rocket Lab and True Anomaly will attempt to deliver and operate space hardware for the military under intentionally tight time frames, as part of the Space Force’s push to solicit “tactically responsive” space capabilities from commercial companies.
Each company will design and build a satellite capable of rendezvousing with other spacecraft in orbit at close proximity, as well as command and control centers for the mission. As part of Rocket Lab’s $32 million contract, it will also launch the satellite with its Electron rocket. True Anomaly will partner with an unnamed “trusted commercial launch provider” for its ride under its own $30 million contract, according to a statement.
Notably, True Anomaly said it would also “leverage $30 million of internal private capital” for the mission, so it will spend a combined $60 million to stand up its Jackal for this contract.
The target for spacecraft delivery under the contract, called Victus Haze, is fall 2025. Once the spacecraft have been built, the two companies will enter successive phases, including a “hot standby” phase where they must essentially remain ready to respond to the Department of Defense’s notice to manifest the satellite and launch. Once in orbit, Rocket Lab and True Anomaly must rapidly commission and ready their spacecraft for operations — with each other.
If all goes to plan, Rocket Lab’s Pioneer satellite will conduct the so-called rendezvous and proximity operations with True Anomaly’s Jackal spacecraft.
The new contracts are similar to those awarded to Firefly and Millennium Space in 2022, which saw Millennium deliver the satellite for launch by Firefly. That mission, called Victus Nox, was executed last September. Under that mission, the two companies had to integrate the payload and ready the rocket in less than 58 hours; then, Firefly was given just 24 hours to launch.
While exact timelines for the Victus Haze mission were not disclosed by either Rocket Lab or True Anomaly, the former company did say in a statement that the mission “will improve … processes and timelines.”
The new mission also includes a handful of additional, ambitious requirements, like on-orbit spacecraft maneuvering, which is meant to simulate a real-life rendezvous with an adversary satellite.
“We recognize the significant opportunity to leverage the commercial space industry’s innovations to counter China as America’s pacing threat,” Space Systems Command program executive officer Col. Bryon McClain said in a statement. “The United States has the most innovative space industry in the world. Victus Haze will demonstrate, under operationally realistic conditions, our ability to respond to irresponsible behavior on orbit.”
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