Quantum Space’s military SPAC is trying to catch the SpaceX IPO wave

Quantum spaceA startup that plans to build highly maneuverable spacecraft for the U.S. military has announced plans to go public through a $1.2 billion merger with a publicly traded special purpose acquisition company, or SPAC.

In the season of massive IPOs, there’s something almost strange about SPACs — in 2021, the drive-thru fad began in the space sector and spread throughout the tech world. Many SPACs have proven disastrous for retail investors who bet on immature companies, but some deals, notably Rocket Lab and Planet, have proven successful.

Another positive outcome was Intuitive Machines, a purpose-built NASA contractor launched by Cam Gaffarian, a longtime space investor who backed a team of former NASA officials eager to sell their expertise back to the agency. Today, Intuitive Machines is a $6.4 billion company that sends a regular series of robotic missions to the moon.

Now, Ghaffarian is trying to do it again with Quantum Space, a startup he launched in 2020 to capitalize on the founding of the U.S. Space Force and the growing need for vehicles that can move between orbits and rendezvous with other spacecraft.

“Defense spending, space infrastructure, and US strategic priorities in orbit are converging at the moment quantum space is ready to expand,” Gaffarian told TechCrunch. “The requirements of the Space Force are growing rapidly, and the demand for maneuverable spacecraft is accelerating. Ranger is specifically designed to meet both.”

At the helm is CEO Jim Bridenstine, a former congressman and NASA administrator during President Donald Trump’s first term. As an advocate for public-private partnerships, Bridenstine will aim to leverage his knowledge of the space industry to win major contracts.

Quantum Space is participating in six government development programmes, including one that could see its spacecraft headed towards the moon. But the company has a simple focus.

“We are designed specifically for national security,” Bridenstine said. While most satellites carry just enough fuel to shift position slightly and eventually jettison themselves, the latest generation of spacecraft — including some sent by Russia and China — are designed to move quickly between orbits and stay in place for sustained observation work.

The company’s Ranger spacecraft is designed to match and outperform these competitors. It is expected to carry a large amount of fuel, allowing it to remain in high orbits for long periods to view competing satellites. The vehicle must also be refuelable in order to be eligible for Andromeda mission orders.

Quantum Space has been selected to join the Andromeda Contract, a $6.2 billion effort that will task companies with developing vehicles for space reconnaissance. Now it must win task orders for actually funded missions starting in 2030.

The SPAC deal is expected to raise $300 million in private investment along with any public proceeds, which will be used to build manufacturing facilities in Tulsa, Oklahoma, capable of producing one Ranger vehicle per quarter by the end of 2028. The next step is to launch the first Ranger prototype into orbit in 2027. The deal was shepherded by Mike Blitzer, the financier who helped bring Intuitive Machines and USA Rare Earth to the public markets.

However, the decision to leave private markets highlights the competition Quantum Space faces. True Anomaly, a startup that is also vying for Andromeda mission orders, has raised $1 billion from venture investors. The company is also looking to take on established defense contractors such as Lockheed Martin, Northrop Grumman, Boeing’s Millennium Space Systems, and others.