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Relativity Space Faces Cash Drain, Exploring Options

The Relativity Space Inc. headquarters in Long Beach, California, US, on Tuesday, Dec. 19, 2023. The US Census Bureau is scheduled to release factor orders figures on February 2, 2024. Photographer: Eric Thayer/Bloomberg (Eric Thayer/Bloomberg)

(Bloomberg) -- Relativity Space Inc., the privately held US maker of 3D-printed rockets that once soared to a $4.2 billion valuation, is running low on cash, raising questions about the future of its launch business, people familiar with the matter said.

The company has faced challenges raising additional capital, said the people, who spoke on condition of anonymity because the matter is confidential. Relativity, which last launched a rocket in March 2023 and has plans to launch its larger Terran R in 2026, hasn’t reached a decision on a path forward.

A spokesperson for Relativity said the company doesn’t comment on speculation or rumors regarding capital. “Relativity Space is fully committed to the development and launch of Terran R,” said the spokesperson, Sarah Lawson. 

“We continue to make significant progress toward our 2026 launch target and are confident in our ability to bring this innovative vehicle to market,” Lawson said. Relativity continues to align itself with strong capital partners, Lawson added.

Walking away from its launch business would mark a significant downfall for the company. Its investors have included Mark Cuban, BlackRock, Baillie Gifford and Fidelity, and Relativity generated plenty of buzzy headlines over its bold approach to disrupting the launch industry.

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Other firms, particularly those that soared to lofty valuations during the blank-check deal frenzy some three years ago, are buckling under the constraints of a highly capital intensive and difficult space business. The Richard Branson-founded Virgin Orbit company filed for bankruptcy in April 2023. This July, Astra Space Inc. completed a take-private deal with its founders, capping a descent from SPAC darling to delisting in three years.

Formed in 2015, Relativity Space burst onto the scene with the ambition to build and launch rockets that were almost entirely 3D-printed. The company boasted the largest metal 3D printers in the world at its factory in Long Beach, California, for making rocket parts, with the eventual goal of 3D printing rockets on Mars one day.

Chief Executive Officer Tim Ellis also expressed hopes of turning Relativity into a serious competitor of Elon Musk’s SpaceX, which has held a de facto monopoly on large US rocket launches with its Falcon 9 for the last few years.

“We definitely saw that the market needed for there to be a second, commercially disruptive and diversified player that was not named SpaceX,” Ellis told Bloomberg late last year. 

In 2021, Relativity received a valuation of $4.2 billion after closing a Series E funding round of $650 million. The company then went on to launch its first rocket, the Terran 1, in March of 2023. The rocket, which Relativity said was roughly 85% 3D printed, successfully launched and made it to space, but failed to reach orbit.

Weeks after that flight, Relativity announced that it was abandoning further test launches of Terran 1 to focus solely on development of a larger rocket called Terran R that would compete more directly with SpaceX’s Falcon 9. 

The company also announced plans to incorporate more traditional manufacturing methods with Terran R, moving away from using 3D printing. Relativity claimed that Terran R would be ready to start launching in 2026. However, the company has been relatively quiet about its progress throughout 2024. 

Relativity also “debuted” a picture of Terran R’s nose cone in August, but later confirmed to Ars Technica that the nose cone in the image was actually one made for Europe’s Ariane 6 rocket, indicating that the company would be outsourcing the manufacturing of its nose cone to an outside company.

©2024 Bloomberg L.P.