By Steve Goldstein
It’s never easy for an executive to witness losing two-thirds of his company’s value in just five months.
But Chris Kemp, founder, chair and chief executive of Astra Space /zigman2/quotes/221344422/composite ASTR +0.75% , based in Alameda, California, has a remarkably measured view in what’s been a rocky year for profitless technology companies, and the space sector in particular. Virgin Orbit /zigman2/quotes/226726551/composite VORB +9.80% and Rocket Labs /zigman2/quotes/222592018/composite RKLB -0.50% have seen similar stock-price slumps.
“We raised a lot of capital at a time when capital was inexpensive,” he said from the sidelines of the World Economic Forum in Davos, Switzerland, where he helped present a new research report with the consulting firm McKinsey on how space can contribute to sustainability and security. “If we have to go back to markets and raise capital, it’s five times more expensive than it was just six months ago, five months ago. So maybe you’re very thoughtful about every dollar we spend.”
Kemp says he has no problem adopting a thrifty mindset. At a list price of $3.95 million per rocket launch, he is positioning the company as the low-budget alternative to the likes of SpaceX. “We don’t want to be selling Mercedes, we want to be selling Toyotas,” he said.
“It doesn’t require changing strategy. It doesn’t require a change of focus,” said Kemp, a serial entrepreneur with internet companies before returning to his passion for space, first with NASA and then with Astra. With no debt on the balance sheet, there’s no urgent need for more money, he said. “I think ‘just take the long view’ is my message. Don’t watch the stock price today, the volatility and what’s happening in markets.”
But the decline in the stock price does affect recruiting. “To pull somebody out of the big Fortune 500 company today, when the market is doing what it’s doing, well, you’ve accepted a higher risk to join the company in the current market climate,” he said.
Astra went public in July 2021, after merging with the SPAC formed by Craig McCaw, who in the 1990s launched his own satellite company that has since folded. With just two launches in the first quarter, Astra is now tied with the Lockheed /zigman2/quotes/200691238/composite LMT +2.56% -Boeing /zigman2/quotes/208579720/composite BA -1.01% venture for fourth most frequent orbital launch provider, behind SpaceX, Russia and China. It’s going to be launching three rockets for NASA that will contain shoe-boxed-sized satellites to monitor hurricanes.
Kemp says Astra’s rockets and launchers are compact enough to put on a plane, a truck, a train or a container ship and move anywhere around the world. He joked the company could launch a rocket from a Walmart parking lot.
Kemp’s ambition is for daily rocket launches. Astra is already in the space engine business by virtue of an acquisition, which is part of a broader plan to offer related space technologies. It then wants to offer the space equivalent of today’s earthbound cloud data centers.
Kemp says that all companies in the future will be space companies, in the same way they’re now all internet companies. When challenged on that point, he was able to come up with use cases for companies picked at random, except for a ball-bearing manufacturer. And that’s only because Astra makes its own ball bearings.
“If you don’t have high precision ball bearings that don’t waste energy, they cause the things to slow down, or to cause vibrations that will [distort] images,” he said. Its ball bearings have to withstand temperatures ranging from negative 200 degrees Celsius, to positive 400 degrees Celsius.