As losses mount, Astra announces a radical pivot to a larger launch vehicle

Rocket 3.3 is seen on the launch pad in June 2022 ahead of the launch of a TROPICS mission for NASA.
Enlarge / Rocket 3.3 is seen on the launch pad in June 2022 ahead of the launch of a TROPICS mission for NASA.
Astra/Brady Kenniston

Astra Space emerged from stealth mode two and a half years ago with a bold vision: It would build inexpensive rockets quickly and with a tolerance for some failure. The idea was simple. If Astra’s small satellite customers would accept a bit of risk, the launch company could cut down on its testing, analysis, and redundancy in design. In turn, Astra would pass those launch savings along to customers.

“It’s a no-brainer from an economics perspective that for these kinds of payloads, you should not be targeting 100 percent reliability,” Astra co-founder Adam London said in February 2020.

At the time, the company was preparing for the first flight of its Rocket 3 vehicle, a micro launcher capable of lofting about 50 kg into low Earth orbit. That rocket exploded in March 2020 during a wet dress rehearsal test on the launch pad.

Since then, Astra has attempted seven launches of its Rocket 3 vehicle. Only two of these seven flights were successful. Particularly embarrassing was the company’s most recent launch of Rocket 3 two months ago, when the upper stage shut down early, failing to put two tropical activity monitoring satellites into orbit for NASA.

Given all of this, Astra on Thursday announced a reset of its plans moving forward with regard to launch activity. The most recent failure appears to have catalyzed Astra to move in a new direction. In short, Astra will shift away from its previous mantra of being lean in terms of staffing, moving at breakneck speed, and being willing to tolerate failure in launch vehicles. It will also be going bigger in terms of its rocket size.

Astra CEO Chris Kemp announced the changes during a call with investors in the publicly traded company on Thursday evening after the US stock markets closed.

Big changes

“We’ve made a few key decisions,” Kemp said. “First, we’ve increased the payload capacity target for launch system 2.0 from 300 kg to 600 kg. Second, we’re working with all of our launch service customers to re-manifest on launch system 2.0. As such, we will not have any additional flights in 2022. And third, we’re increasing investments in testing and qualification which will add additional time and test flights to our schedule prior to resuming commercial launch operations.”

Let’s unpack this statement. Astra will no longer launch the largely unsuccessful Rocket 3. Instead, the company will now pivot to Rocket 4, which is also being called “launch system 2.0.” Additionally, the company will target a larger payload capacity for the new rocket, a move that Kemp explained is intended to make the booster more attractive to mega-constellation customers.

Astra has set ambitious targets for payload capacity (600 kg) and price ($5 million) for Rocket 4. This would be an attractive price for such a capability. As advertised, it would have about double the payload capacity of Rocket Lab’s Electron vehicle at two-thirds the price.

However, there are a couple of key asterisks in Astra’s investor presentation. For example, the company notes that 600 kg is the “target payload to mid inclination low Earth orbit over the course of the product lifecycle.” Initially, therefore, it’s highly likely that Rocket 4 will not deliver anything close to 600 kg to low Earth orbit. As for the price, $5 million is the “base bulk launch price for dedicated launches, assuming no price increases due to inflation.”

Astra's slide for its launch system 2.0 includes some asterisks.
Enlarge / Astra’s slide for its launch system 2.0 includes some asterisks.
Astra

Even if Astra can meet these price and payload capacity targets, there are questions about the long-term viability of Rocket 4. A rocket priced and sized like this is roughly equivalent to the Falcon 1 rocket developed by SpaceX in the 2000s. However, in 2009, the company pivoted to the much larger Falcon 9 vehicle after determining the commercial market could not support such a vehicle. Rocket Lab is also working hard to build its medium-lift Neutron vehicle to serve the mega-constellation market, as Electron has limited use cases.

Finding funding

Kemp said Astra plans to conduct test launches of Rocket 4 next year, but it cannot commit to starting commercial service with the rocket in 2023. Whenever the rocket comes online, however, it’s clear that this vehicle will be developed with a radically different philosophy that puts more traditional rocket production practices in place. Failure, it seems, is no longer an option.

“The team has been diligently working on the launch system 2.0 design,” said Benjamin Lyon, Astra’s relatively new chief engineer, during the call with investors. “Core to this effort are key capabilities that we built out over the last year. For example, establishing a dedicated mission management and assurance team and investing in a state-of-the-art metrology failure analysis and reliability lab.”

As part of this growth, Kemp said Astra has built a “world-class” team and has more than tripled the size of its workforce during the last year.

It is not clear whether a larger Astra has the finances to survive one to two years of development work. Astra reported a net loss of $168 million during the first half of 2022, with revenues of just $6.5 million. Meanwhile, the company has cash and marketable securities of about $200 million on hand.

To reach the point where it can start launching Rocket 4, Astra will probably need to raise additional money, trim expenses, and increase sales of its other main product, the “Astra Spacecraft Engine,” an in-space electric propulsion engine. The company says it has started delivering these engines to customers, but it offered few details on potential revenue from these sales.

Space is hard. Profitability in rocket propulsion is arguably harder.

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