I might be pointing out the obvious when I say that building 130ft tall rockets designed to carry 8,000kg payloads into outer space takes a whole lot of knowledge, hard work, ingenuity and yes, a whole load of cash. With that squarely in mind, Rocket Lab CEO (and 2019’s M2 Man of the Year) Peter Beck has decide to make the big play of bringing the company into the public domain. It’s a decision that Beck had in the past indicated he was skeptical of making, yet two weeks ago he announced Rocket Lab is joining a growing swell of space companies entering the stock market, all in quick succession.
Rocket Lab is opting to merge with Vector Acquisition, a SPAC (or special purpose acquisitions company). SPAC’s are essentially ‘blank cheque’ companies without actual products, instead, they bring together investors and look to merge with another company that is in need of funding. Basically, Rocket Lab has all the ideas but needs someone with the cash and Vector has all the cash but is looking for something to put it towards. A couple signatures and handshakes here and there and voila! The deal sees Rocket Lab enter the Nasdaq stock market listings with a valuation of $4.1 billion and in the meantime, Rocket Lab will receive an injection of $750 million in capital.
Much of this boost will go towards Rocket Lab’s current project, Neutron, a rocket which is designed to transport payloads of up to 8,000 kilograms to low earth orbit. For reference, Rocket Lab’s last effort, Electron, could support payloads of just 300 kilos. Basically, this is a massive project, so the move to seek financial backing makes all the sense in the world. While the company’s decision to partner with a SPAC instead of entering the market through regular IPO (initial public offering) has some questioning whether ordinary investors will be turned off due to the raised price of stock, Beck believes opting for partnership with Vector will accelerate the process of getting Neutron built and ready for flight due to avoiding some of the slow goings of fundraising through regular IPO’s. Based on his track record, there’s plenty of reason to back Beck’s judgement, as Rocket Lab has established itself as one of the most relevant players in the space game and now with a big boost of capital, they’re all hands-on deck to hit the ambitious goal of having Neutron operational by 2024.
Watch Peter Beck announce Rocket Lab’s Neutron rocket below: