Coming in the wake of an historic rocket launch earlier this year, BluShift Aerospace, a startup rocket company based in Brunswick, recently launched an equity crowdfunding campaign to raise the capital necessary for its next phase of development.
The company—one of only a few in the world that has developed and launched a commercial rocket—made history on Jan. 31, 2021, when it conducted the world’s first commercial launch of a rocket powered by a bio-derived fuel. The launch of its Stardust 1.0 rocket took place at Loring Commerce Centre in Limestone, Maine.
It is now raising up to $1 million via an equity crowdfunding campaign that allows non-accredited investors (i.e., people who don’t meet the SEC’s financial or other requirements to be an angel investor) to invest in early-stage companies.
The company this week also announced the Maine Technology Institute has conditionally approved it for up to $300,000 in non-dilutive capital in the form of low-interest loan. The MTI money comes with conditions, though. The company will receive $150,000 if it raises at least $500,000 via its crowdfunding campaign, and the full half a million dollars if it raises $1 million.
As of Thursday, the company had raised $441,847 of its initial $500,000 goal. Deri held a video Q&A with investors on April 28 (watch the recording here).
BluShift is one of a handful of Maine startups in the “new space economy.” In Maine, the new space economy could contribute $500 million to $2.5 billion per year to the state’s GDP by 2040 and provide between 3,400 and 6,700 good paying jobs per year by 2040, according to a study commissioned by the Maine Space Grant Consortium, which is funded by NASA.
‘Uber to space’
BluShift’s mission is to be the first company to provide a dedicated rocket launch service specifically for nanosatellites, which can be the size of a shoebox, but provide everything from weather mapping to research capabilities. This differs from more well-known companies like SpaceX, which is designing heavy rockets to deliver people and supplies to the International Space Station and beyond.
“We think of ourselves as the Uber to space, not the freight train to space,” Deri said. “Freight trains can get things from the east coast to the west coast, but rarely does one want to take a freight train to the supermarket.”
The company’s historic launch in January was carrying three customer payloads, one academic and two commercial.
That launch represented the culmination of six years of R&D, more than 200 engine tests, 50+ launch stakeholder interviews, the successful completion of grants from NASA and MTI, and the development of the company’s proprietary modular hybrid rocket engine powered by bio-derived fuel.
While the January launch was sub-orbital, the company plans by 2023 to provide its first low-earth-orbit launch service.
There is a $69 billion market potential for launching these nanosatellites, according to Deri. These satellites, also called cubesats, are used for research as well as commercial applications like enabling broadband services, weather mapping, and providing satellite images of Earth.
The Maine Advantage
Maine is especially well placed to take advantage of this market opportunity, according to Deri, who previously co-founded and grew a solar distribution and light manufacturing company, altE Store, to $30 million in revenue.
Maine is the only place on the eastern seaboard where a rocket is able to be launched into polar orbit, which is a north-south orbit (i.e., a satellite will pass over the equator at a different longitude on each of its orbits), Deri said. That’s important because 50.2% of the market for launching nanosatellites require a polar orbit.
Because of Maine’s unique position, the nonprofit Maine Space Grant Consortium is spearheading efforts to create a Maine Spaceport that would act as a hub for future space-related activities, from research to rocket launches and mission control.
Currently, the only places a company could launch a satellite into polar orbit are from Alaska, which is complex logistically, and a military base in California, which is very expensive.
“It would cost a couple times more than our rocket cost us to be allowed to even launch from there,” Deri said.
Having launch facilities on the coast of Maine gives bluShift an incredible competitive advantage from a cost perspective, Deri said. Not only is it cheaper than the Alaska and California options, but because bluShift would be launching off a portion of the Maine coast away from people or property, the company’s insurance costs are much lower. Deri said insurance costs can represent 20-25% of the cost of launching a rocket.
Edible fuel…
The company’s bio-derived fuel and engine with half the complexity of a traditional rocket engine also contribute to keep the company’s cost down.
While the fuel is proprietary, Deri said it can be made from source material collected from “farms across America.” One of the benefits to the fuel—500 lbs. of which is required for each launch—is that it’s non-toxic, has zero explosive value, and cheaper to make than fossil fuel-derived rocket fuel.
“You could literally eat our fuel and nothing bad would happen to you,” he said. “I can’t certify this statement but to the best of my knowledge, ours will be the only rocket you can ditch into the waters of Maine and it would not be toxic to the ecosystem below.”
Creating a biofuel that was efficient and safe for the environment was important to Deri.
“It’s appropriate to my value system that we choose a propellent that’s harmless to planet earth,” he said. “Why screw up this one just to get to other ones that aren’t as pretty?”
The company’s rockets have a hybrid engine that takes this solid bio-derived fuel (with a liquid oxidizer). These engines are easier and less expensive to build, according to Deri.
“We have half the plumping that a liquid fuel rocket engine does,” he said.
The result is that bluShift only needs a handful of customers per launch to be profitable.
“It’s like a restaurant where you don’t need to pack it with 100 people to be profitable,” he said. “Instead, it’s a micro-restaurant that only needs to have three people in there to be profitable.”
That said, to get to profitablity, Deri expects the company will have to go down the traditional VC route over the next three years to raise an additional $5 million seed round. But he estimates that within four years, the company would be fully funded by the revenue it generates from deploying nanosatellites to polar orbit.
“I’m a big believer in existence by revenue,” he said. “I want us to get to the point where we’re generating revenue and paying for our personal as soon as possible and we’re not dependent upon additional series rounds of funding. Because the way I see it, the more rounds of funding we have that are series based, the less likely we’re able to keep this in Maine, which is key to us.”
