Skyrora's no good, very bad fourth quarter
Issue 38. Subscribers 955.
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Skyrora's no good, very bad fourth quarter
A week ago, Skyrora COO Lee Rosen abruptly, or at least it appeared, left the UK-based launch startup to join the founding team of commercial space station startup ThinkOrbital. The move came just seven months after Rosen took up the role at Skyrora promising to bring a great deal of operational launch experience to the startup from his decade of service at SpaceX. Rosen's resignation was the latest in a line of unfortunate events that has left the company reeling as it enters 2023.
Interesting fact: When it was founded in June 2017 the company was called Space Alba. The name, however, did not last long, with the change to Skyrora taking place less than two months later.
A Snopes article
In October, Snopes published a series of articles examining the various business dealings of Max Polyakov. The fifth and final article in the series was dedicated to Skyrora, a company in which Polyakov had indirectly become the major stakeholder in. What made matters worse was that the article also detailed that Skyrora CEO and founder Volodymyr Levykin had been a key business partner of Polyakov since 2001 and that Skyrora had, at least in part, been funded with proceeds from "predatory dating websites."
If the name Max Polyakov sounds familiar, it's because he was controversially forced to sell his stake in US-based launch startup Firefly Aerospace by the federal government. The US government cited national security reasons for the mandatory divestment.
The Snopes article also outlined the complex ownership structure of Skyrora and its parent company, Skyrora Ventures. The latter is owned by Blue Trident Capital, which is itself owned by the Hong Kong-based Digitroom Holding Limited. It is the last rung on the complex ladder that introduces the controversial Polyakov who owns 77% of Digitroom with Levykin holding the remaining 33%.
A failure to launch
In October, Skyrora announced that it had attempted a launch of its Skylark L suborbital launch vehicle on 8 October. There was no public announcement of the launch prior to the company revealing the failure, save for a NOTAM notice that detailed a six-hour launch window. And the announcement of the failure itself would not be published until 13 October.
Although no clear footage of the failure has yet been released, a short clip from a BBC article shows the rocket losing control almost immediately after it had left the pad. According to Skyrora, the rocket landed in the Norwegian Sea just 500 metres from where it had taken off. In an update published on 1 December, the company blamed a “software complication” for the failure while assuring that all mechanical systems aboard the vehicle had performed as expected.
So why the delay in announcing the failure or the lack of publicity leading up to the launch? It’s really hard to say. As space fans, we have definitely become somewhat spoiled with livestreamed launch views from operators both big and small. It is not completely unprecedented for a company to avoid the limelight by not announcing an upcoming launch, but it definitely struck me as usual especially since in the past the company had publicized the launch of a smaller vehicle both just before and just after liftoff.
The funding question
Skyrora shares very little about the company’s funding efforts, choosing not to publicize the closure of any funding rounds. However, both Crunchbase and Dealroom put the total funding secured by Skyrora at over £30 million, with the most recent addition being a £25.5 million Series A closed in early 2020. I genuinely don’t know how these figures were sourced. There are a few brief mentions of the Series A in articles discussing funding secured by Scottish companies during 2020, but these entries do not expand on the round or include any sources.
Not everyone agrees about Skyrora’s funding efforts, though. According to CB Insights, Skyrora has received €3 million from ESA as part of the agency's Boost! programme and an undisclosed amount of seed funding. PitchBook expands on the seed round details somewhat, putting a figure of around €5 million that was received in 2019. It also mentions the company receiving some additional funding as part of its stint in the Seraphim Space Camp accelerator program in late 2018. However, considering the large new manufacturing facility Skyrora moved into in July and its staff complement of at least 70, it’s hard to see how the company is still operating off its seed funding.
A 2019 Space Bandits interview with CEO Volodymyr Levykin may hold some insight here. According to Levykin, “investment for Skyrora has stemmed from a private group of investors, of which I am included.” This may refer to its parent company Skyrora Ventures, which was founded in early 2018 and which Levykin holds majority ownership and voting rights. This seems to lineup with the Snopes reporting.
What’s interesting about this possibility is that Skyrora Ventures appears to have held onto much of the funding, potentially dolling it out when and if it was needed. As of the end of 2020 (the most recently publicly filed financial statement), Skyrora Ventures had £24,793,823 in net assets including £16,177,179 in cash and cash equivalents. Skyrora, on the other hand, had net assets of just £405,084 of which £237,343 was cash in hand.
In 2021, we see the ESA funding come through on the financial statements with net assets jumping to £4,435,910 with £1,114,707 cash in hand at the close of last year. This is, however, the only blimp on the available financial statements, making it difficult to track where the company’s funding is coming from.
What has Lee Rosen got to say?
When I asked Skyrora for a comment on the company’s series of unfortunate events and specifically on the departure of Lee Rosen, I was referred to the 1 December update on the Skylark L failure and told the company had “no further response.”
I also approached Rosen for a comment and he responded by saying that he had “resigned from Skyrora for personal reasons.” Additionally, in a reply to a comment on LinkedIn, Rosen stated that he was leaving Scotland because he “missed the Cali sunshine!”
If you only take Rosen's comments into account, it appears innocent enough. However, if that is the case, I find Skyrora’s reluctance to comment and lack of a public statement a little baffling. This should have been the easiest piece of PR the company would tackle all year.
During the course of my research for this story, I also came across the Glassdoor listing for Skyrora with many commentators pointing to an underpaid and inexperienced workforce. Although I do think this could be an interesting insight into the company, it could just as easily be bitterness from disgruntled former employees.
With the cash the company has on hand, it’s difficult to see how its 70+ workforce, which would generally result in a burn rate of around €200,000 a month, is being paid top dollar.
When reviewing the current vacant positions on the company’s career page, salaries did appear to be within national averages for those positions, apart from a system engineer position which appeared to fall short. However, in examining archived listings it does appear that in 2021 this was a different story with many positions falling just below or significantly below averages in the UK.
The company has also always had a vibrant internship programme that it often celebrated. However, the company has now, according to its career page, put a halt to its summer internship programme for both its engineering and business teams. This is likely temporary, but it does hint at the fact that the company is reexamining its reliance on interns as it pushes to conduct an orbital launch attempt of its Skyrora XL vehicle in 2023.
Here’s to 2023
Skyrora along with Orbex, Rocket Factory Augsburg and Isar Aerospace are all planning to launch the maiden flight of the company’s respective orbital launch vehicles in 2023. If even one manages it, it will be a significant moment for Europe’s independent access to space. And although the maiden Skyrora’s Skylark L flight was a failure, the lessons learned and data collected on that launch will be applied to future launches, making it all the more likely to succeed.
I am not a fan of the murky funding and ownership of Skyrora. However, I am also not naive. A launch startup has to attract around €100 million to get it to a maiden orbital launch attempt. Pre-Covid, this would have been a tall ask. Today, it’s getting close to impossible to attract that kind of funding. So I do not begrudge Skyrora and its CEO for calling on every chip they hold to ensure the company’s survival.
If I could ask one thing from Skyrora and launch startups in general, it would be to offer just a smudge more transparency. It is something that I often find myself asking. I know space is hard, and I know that Skyrora and many other European launch startups are going to make mistakes. However, hiding failures and missteps don’t help the situation. It makes these companies difficult to celebrate and even more difficult to trust.
How do you like the new digs? - ESA announced that after more than two years, the renovation of the agency's headquarters in Paris has been completed. In the press release, the agency described the building with this absolutely beautifully written line: "This historic building, built at the beginning of the 20th century, was a silent witness to the very beginnings of the European space adventure." Whoever wrote that deserves a raise! According to the agency, the renovations were completed on time and on budget, with employees moving into the building for Easter 2023.
99 problems but funding ain’t one - German satellite manufacturer Reflex Aerospace has secured €7 million in seed funding. The round included investments from Alpine Space Ventures, High-Tech Gründerfonds (HTGF), and a third unnamed based in Bavaria. According to CEO Walter Ballheimer, the funding will be utilized to set up the company’s first production capability in Munich and close to double its workforce to 50 across all sites over the next year. The company projects that it will extend its seed round to €12 million by the end of Q1 2023.
Coal for the Civil Aviation Authority - Virgin Orbit has postponed the first flight of the company's LauncherOne vehicle from UK soil. The launch window for the flight from Spaceport Cornwall was expected to open on 14 December. However, the company is not citing technical and regulatory challenges that have forced the launch back until at least after Christmas. According to BBC's Jonathan Amos, neither Virgin Orbin nor its passenger satellites have yet been licensed for flight from the UK.
SaxaVord has a secret admirer - Rocket Factory Augsburg posted a vacancy for a Launch Site UK project manager. In examining recent company filings, I found that RFA had registered a subsidiary called Rocket Factory LTD in Grandtown-On-Sprey in Scotland. Presuming that RFA would want to be as close to the company's UK launch facility as possible, this likely narrows the spaceport in question down to SaxaVord since Orbex has taken over the construction and operation of Sutherland.
Almost time for some flames - Germany launch startup Rocket factory Augsburg announced that an RFA One upper stage had been installed onto the company’s test stand at Esrange in Sweden. The stage will be utilized for an integrated system test (IST) campaign. Testing was expected to begin before the end of the year, but according to a source, there have been schedule delays due, in part, to colder-than-expected weather in Sweden. The stage that will be used for the IST campaign will also be utilized aboard the first RFA One flight, which is expected to liftoff towards the end of next year.
Space Rider gets a lab - ESA awarded a contract to SAB Aerospace for the preliminary development of the microgravity In-Orbit Servicing LABoratory (IOSLAB). IOSLAB is a flexible, universal, multi-experiment lab whose design is optimized and compatible with Space Rider interfaces. IOSLAB offers slots for both pressurized and unpressurized experiments. The first IOSLAB mission will be carried aboard the maiden flight of Space Rider in 2024.
Megaconstellation in Scotland’s backyard - US-based Mangata Networks has signed an £83.7 million financing deal to build a satellite manufacturing facility in Scotland for its multi-orbit broadband megacosntellation. The funding and assistance package has been provided by the Scottish Enterprise, Scottish Government, UK Government, and South Ayrshire Council. This funding comprises £54.5 million from Scottish Enterprise and £29.2 million from the Ayrshire Growth Deal provided on commercial terms with the amount being paid back over the next 15 years. Mangata plans to launch nearly 800 satellites into orbit and with many European launch startups selecting SaxaVord in Scotland to launch their vehicles, the deal could potentially have wide-ranging befits to both the UK and Europe as a whole.
Where’s a space battery on Christmas morning when you need it - The UK Space Agency announced that it will collaborate with the National Nuclear Laboratory to develop the world's first space battery powered by Americium-241. In order to produce the Americium-241, researchers will utilize used fuel from nuclear reactors. Work on the new space batteries will be conducted in a new £19 million purpose-built laboratory in Cumbria.
Honey, do you know where I left the space debris? - The United Nations Office for Outer Space Affairs and the UK government have partnered to enhance international expertise in the registration of objects launched into outer space. The multi-year project will strengthen existing joint efforts between the partners covering topics such as space sustainability and climate action.
There is such thing as a free ride - The German Space Agency has announced the 26 institutional payloads that will launch free of charge aboard the first flight of Rocket Factory Augsburg RFA One and the second flight of the Isar Aerospace Spectrum. The selections were part of a DLR micorlauncher competition that was launched in May 2020. A total of seven payloads will be launched aboard the RFA One flight for a total payload mass of 136 kg. 19 spacecraft will be launched aboard the second Spectrum flight with a total mass of around 150 kg.
Mo money mo antennas - French satellite antenna equipment manufacturer ANYWAVES has raised €3 million in funding. The company will utilize the funding to reach industrial maturity. The announcement did not come with any details regarding the source of the new funding.
A little help with admin - French launch aggregator and launch services provider RIDE! Space signed a contract with South Korea Earth observation startup TelePIX Co to manage the registration of its radio frequencies with the International Telecommunication Union. TelePIX CO plan to begin launching a demo mission in 2024 and begin building out its Earth observation constellation from 2025.
Sure, but will my phone have signal? - Swiss IoT startup Astrocast has signed a "multi-million-dollar contract" with Israeli logistics company ArrowSpot Systems to begin mass production of ArrowSpot's ArrowTrack SAT device. ArrowTrack SAT is an advanced hybrid tracking solution that combines cellular and satellite communication access to track IoT assets globally.
Cash me outside space debris - Japan's Astroscale has extended its order from AAC Clyde Space for the company’s STARBUCK and Sirius data handling solutions. The solutions are to be used aboard Astroscale's ELSA-M debris removal spacecraft, which will be capable of removing multiple pieces of debris from orbit at a time. The order extension increased the contract value by £611,000.
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