By Joey Roulette
WASHINGTON, Sept 30 (Reuters) - In-space manufacturing startup Varda Space has raised $250 million in a Series D round at a $1.6 billion valuation, the company told Reuters, as it ramps up missions to produce pharmaceuticals in microgravity.
El Segundo-based Varda is one of a handful of US companies building a fleet of uncrewed space capsules that can function as orbital laboratories or manufacturing platforms for products whose development in space yields better efficiencies or purities
than in the gravity of Earth.
The $250 million round closed this month, led by Lux Capital and Natural Capital, putting Varda's total amount raised at $598 million since its founding in 2021 by CEO and former SpaceX engineer Will Bruey and Founders Fund partner Delian Asparouhov.
The company since 2023 has deployed six missions to orbit with its gumdrop-shaped free-flying W-Series capsule, with all but its fourth mission successfully re-entering from space. It plans to debut a next-generation capsule in 2030.
Varda is planning to launch two capsules to space at once for the first time on Thursday, using a rideshare mission on SpaceX's Falcon 9 rocket. The two capsules are carrying hypersonic research payloads for the Pentagon and commercial customers.
SpaceX is phasing out its Falcon rocket and winding down rideshare missions, alarming much of the spacecraft industry, Reuters has reported. But Varda is largely insulated from the launch squeeze – it has 28 launches with different providers booked through 2027 to 2029, Bruey said.
While orbital re-entries have drawn keen interest from the Pentagon's Golden Dome missile defense efforts, Varda has bet on the pharmaceutical industry for much of its commercial operations.
"The biggest milestone in the company's history is going to be right around the turn of the decade when we take one of those microgravity-enabled formulations and we inject it into a human in the clinic," Bruey said.
About 70% of Varda's payload customer base for next year is government-based and the rest is commercial pharmaceutical work, Bruey said. He expects that proportion to gradually flip by 2032, underscoring the company's bet on pharmaceuticals.
The company in August appointed biotechnology executive and Pfizer veteran Mikael Dolsten to its board, and about 18% of Varda's some 275 employees have pharmaceutical backgrounds, Asparouhov said.
Roughly the size of a dishwasher, the company's latest pods can orbit Earth for days, then re-enter the atmosphere at some 25 times the speed of sound, with the re-entry itself offering hypersonic research capabilities for the Pentagon.
Varda faces competition from SpaceX's Starfall program that debuted this year, as well as startup Inversion Space in a nascent point-to-point transportation market, where the Pentagon sees orbital space as a swift highway for shuttling military cargo anywhere in the world in roughly an hour.
The business of manufacturing things in space has grown as the 2030 retirement of the International Space Station approaches. That 26-year-old orbital laboratory, managed by a group of space powers, has been a key platform for space manufacturing research in areas ranging from artificial organ growth to fiber optic cables.
(Reporting by Joey Roulette; Editing by Stephen Coates)
