Space is “Open for Business” — Announcing DCVC’s Investment in Rocket Lab

By Matthew Ocko, Zachary Bogue

22 Mar 2017

Space

Open launch bay door? Space is open for business

Imagine the possibilities if launching a satellite was as easy as buying a car. Would you launch a set of satellites that deliver novel benefits for improving agriculture? Or responsible mining? Find water beneath the cracked earth of water-stressed regions? Track and help predict weather — from dangerous near-term storms to the long-term effects of climate change? Or, delivering Internet from space so cheap you can break the grip of totalitarian regime censors or of extortionate network providers?

With today’s announcement of DCVC’s investment in Rocket Lab, we’re one step closer to that reality. Rocket Lab is on the cusp of providing inexpensive, lighter payload launch (~150kg) on up to weekly cadence.

We’re proud to back Rocket Lab because:

We believe Rocket Lab has the potential to be a superlative investment (within our early stage investment parameters of 25x to 100x+ returns).
It has “torn off the ceiling of the world,” or as Peter Beck, the intrepid CEO of Rocket Lab likes to say, made “space open for business.”
Rocket Lab’s capability will be profoundly enabling for most space-related companies (not least of which is DCVC portfolio company Planet) because it will reduce capital requirements, increase potential satellite count in orbit for longer life and greater reliability, enable new shared capabilities among more satellites, and offer greater predictability based on frequent, reliable launch.
The huge commercial and government appetite for smaller payload launch at a higher cadence — and Rocket Lab’s quiet credibility and key industry relationships built over the past decade — mean that it has a considerable backlog of customers, many with multiple launch requests. Assuming successful launches within the next year, Rocket Lab can rapidly begin generating significant revenue.
Rocket Lab is a technology leader with a unique, defensible, multi-year lead. Any single innovation would have been impressive, but uniting all of them at once in a robust system is not trivially replicated by any team: cost-effective, high quality fabrication of carbon-fiber rocket bodies that can withstand cryogenic fuel temperatures; scalable (in number and size) 3^d-printed rocket engines that are both cost-effective and reliable; manufacturing and automation techniques to make everything repeatable and cost-effective while ensuring high quality; mechatronics systems for rapidly positioning and launching a nearly 60 foot high rocket; novel fuel management and control systems to put a payload into orbit for the same fuel a 747 uses from SFO to Auckland; ultra-reliable custom miniaturized electronics, electromechanical, and flow systems, all optimized for weight; and the multiple and sometimes extreme innovative leaps required to test all of these systems, both in isolation and simultaneously.

Just one aspect of Rocket Lab's rigorous system tests: live engine firing

Last but not least, Rocket Lab has truly made building complex rockets a repeatable, industrial-scale process. From engines that can be 3^d-printed, ready to mount and fire within 24 hours, to a rocket body that can be shipped in pieces like a pre-fab house and snapped together on-site, to complex and mission critical subsystems whose installation has been simplified to the point that a robot could handle it, to launch prep and rocket readiness measured in hours versus weeks, Rocket Lab is ready to operate at a scale, cadence, cost-effectiveness, and customer base more like that of Henry Ford than Rolls Royce. At DCVC, these characteristics suggest to us a durable, massive, world-changing company.

Some of those awesome 3D-printed high performance engines up close

Rocket Lab, DCVC’s “big data” and “deep compute” Heritage, and the Power of Enabling Technology

Is Rocket Lab a “deep compute” or “big data” or “machine learning” technology platform? Well, their team is certainly masters of those techniques to collect immense amounts of streaming test and telemetry data, analyze it, derive unique insight, and shape huge simulations around it. But, as with our seminal investments,

in the 90s, in the storage tech company that enabled inexpensive scale-out SATA and SAS arrays, and in turn made “big data” possible in the first place;
in the 2000s, in the open source virtualization tech that is still at the heart of AWS, and was instrumental in catalyzing cloud computing and reducing the cost of scale out cloud compute on big data;
and, two years ago, in chip company Nervana (acquired by Intel), to transform deep learning and AI with a 100x compute/power advantage three years ahead of others’ road maps, enabling inexpensive, high-performance scale-out AI, in the cloud, on big data,

then Rocket Lab is likewise a critical enabling technology that can catalyze tens or even hundreds of billions of dollars of value across the commercial space ecosystem.

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To learn more about Rocket Lab, please visit www.rocketlabusa.com or follow them on Twitter at @rocketlabusa

Data Collective (DCVC) and its principals have backed brilliant people using deep tech to change global-scale industries for over twenty years, helping create tens of billions of dollars of wealth for these entrepreneurs while also making the world a markedly better place. We hope that Rocket Lab is another bright star in this constellation of simultaneous founder success and societal value.

DCVC brings to bear a unique model that unites a team of experienced venture capitalists with more than 50 technology executives and experts (CTOs, CIOs, Chief Scientists, Principal Engineers, Professors at Stanford and Berkeley) with significant tenures at top 100 technology companies and research institutions worldwide. DCVC focuses on seed, Series A, and then the growth stage companies in its own portfolio. Learn more at www.dcvc.com and follow us on Twitter at @dcvc.