The smallsat launch market is set to get a bump in launch capacity as new launch providers come to market over the next year. Astra is one of those companies, and its strategy is simple — capture the market by building and launching rockets more quickly and more cheaply than its competitors. In this interview, Astra CEO Chris Kemp talks with Via Satellite about how the company’s deal to go public through a special purpose acquisition Company (SPAC) will give the startup the capital to scale quickly and secure its position in smallsat launch. Astra’s deal with Holicity, Inc. is expected to close on June 30, and to provide up to $500 million in cash proceeds.

Kemp also addresses how the recent acquisition of Apollo Fusion will help the company expand into spacecraft manufacturing. Astra isn’t just looking to beat SpaceX at cost-per-kilogram launch prices, but also to offer customers a plug-and-play spacecraft and launch option with full service to space.

VIA SATELLITE: Your December launch reached space, but was just shy of orbit. What are the plans for your next launch and for ramping up commercial service?

Kemp: This summer we intend to launch our first commercial customer, we’ve already started production on the rockets. We’ll have about a dozen of the rockets rolling off the production line monthly, and we’ll start monthly launches in the fourth quarter.

VIA SATELLITE: That is targeting a pretty rapid cadence early in commercial service. How will your approach to rapid manufacturing enable you to launch that frequently?

Kemp: It’s fundamentally because we designed the entire company, the vehicle, our launch system, and our spaceport strategy around daily space delivery. We’ve designed the rocket like a car. It’s not made out of carbon fiber, it’s not 3D-printed, it’s designed to be manufactured at scale. We went into the company with the mission of daily space delivery. Nothing we’ve done has been antithetical to that. That’s why we’re here today, over four years [later] going public, on track to do monthly launches. It’s been almost four years since Rocket Lab first got to space, and they’re still not doing monthly launches, just to give a sense of the relative velocity of the company. We’re going to be targeting weekly next year, and then we’re targeting daily within the next couple of years.

VIA SATELLITE: What is your current rate of production?

Kemp: One a month. The team is working on getting that through successive generations of the rocket and the factory, up to one a day.

VIA SATELLITE: How does your portable launch system play into that rapid launch plan?

Kemp: If we were to try to tie up Cape Canaveral or Vandenberg every single day, that probably would be tricky. Those are pretty high overhead places. We love Kodiak for the same reason [SpaceX] likes Boca Chica. It’s a private spaceport where you can do an orbital launch and lift off flat over the ocean. That’s critical because having a completely private spaceport means you are fully licensed by the FAA.

Everyone else launches from government ranges and there’s a tremendous amount of overhead. Arguably, there’s more cost in the overhead with these ranges than what our entire cost structure of the launch will be, in our plan. Not to say that it won’t change and evolve. There’s been a lot of commitment from [U.S. Space Force] General Raymond and others to bring the cost down at these ranges.

We can take the entire launch system, pack it up into four shipping containers, and deploy it anywhere in the world and launch in a few days. And we have demonstrated our ability to do that with the DARPA launch challenge. We’ve got it in testing here at the headquarters facility, we’re going to move it to our other test facility, do a high fire test, and then move it up to Kodiak and launch.

VIA SATELLITE: Do you see yourself taking that system outside of the U.S.?

 Kemp: We do. We are already in discussions with a number of other countries that are great allies to the U.S. that are interested in hosting launches. It builds on what Rocket Lab has done. The reason why an Auckland-based company that manufactures everything in Auckland, and launches everything in New Zealand, can operate as a U.S. company without violating ITAR [International Traffic in Arms Regulations] is because they have a treaty between New Zealand and the United States of America that they’re exempt from ITAR constraints because New Zealand will never develop rocket technology. What if you had an American company with an American rocket system that flipped the script and did the exact same thing? There are so many countries with space agencies, only about five or six of them can actually get to space. That’s an incredible opportunity to ensure that it’s the United States and not China that provides this technology to our allies across the world.

VIA SATELLITE: Your TROPICS launch contract with NASA for three launches was awarded for just under $8 million. How are you able to offer launch so cheaply?

Kemp: The material cost of our launch vehicle is just over $1 million today. We forecast that costs will go down over the next few years, as we scale production, and with volume purchasing, economies of scale, and more automation in the factory. Today, our entire cost with labor, range, fuel, and cost of the rocket is less than $2 million. We can profitably offer launches for half the price of Rocket Lab today. Our critics and Rocket Lab will probably assert we’re only [launching] 50 kilograms, and they’re right. But in the next version of the rocket, when we triple or quadruple the payload capacity, we’re not going to increase the price. At that point, we’ll be both cheaper on a dollars per launch and dollars per kilogram basis — and that’s next year.

Our stated goal is $500,000 of cost for 500 kilograms — $1,000 a kilogram. It gives us pricing flexibility, so if we have a customer that is doing a megaconstellation, we can do it for less than the price of Falcon 9 and still make money. That’s the key. If you’re not competitive against Falcon 9, then why wouldn’t SpaceX take all the business?

There are two ways to build a great space company. You can build giant rockets and optimize economics based on the rocket equation. Or you can build a giant factory and make hundreds or thousands of rockets and optimize economics based on your scale. Anything in between, you’re competing directly with SpaceX. Or you can focus all of your energy on scaling production — and that’s Astra. That carves out a clear lane for us that is different from anyone else in the industry. No one has said, we’re building a rocket factory and we’re going to make hundreds or even thousands of rockets a year, and we’re going to operate globally from dozens of spaceports.

VIA SATELLITE: On the increase in capacity, Astra recently said it would increase capacity to 500 kilograms from 50 kilograms. Is that the next vehicle?

Kemp: That is where we want to stabilize things, for a lot of different reasons. But there will probably be a step in between. There will be a step next year that has more capacity, and there will be another step after that. There are 100 upgrades between Rocket 3.2 and 3.3, very similar to the way Tesla innovates on cars.

Whereas a lot of companies, their gimmick is 3D printing, or their gimmick is a giant composite tank, we have no gimmicks. We’re a business that uses software and data science to drive decisions to maximize cash flow, profitability, and scale. Sounds really boring, but it’s going to be a good recipe for a great company. We won’t have the sexiest rockets, but it’s like Ford versus Ferrari.

VIA SATELLITE: Your investor presentation talks about plans in the future for more than just launch, such as spacecraft platform services. How does the acquisition of Apollo Fusion fit into that, and how might you integrate their capabilities into what you’re doing with launch?

Kemp: Apollo Fusion immediately gives us access to new orbits, it increases our addressable market. We can now put something in GEO, MEO, [Geostationary Orbit, Medium-Earth Orbit] we can throw things on the moon. This engine allows us to take payloads anywhere, using power from the sun, and an incredibly efficient Hall effect engine.

They know a lot about how to build spacecraft. There’s going to be an effort ramped up here to manufacture spacecraft, and [Apollo Fusion CEO] Mike Cassidy is going to be leading that effort. It helps accelerate our strategy that will help our customers get to space even faster. If Astra can iterate on propulsion, and power, and all the sensors, we can provide a turnkey, plug and play into an existing spacecraft. None of these companies want to build satellite constellations, they want to be in space, collecting data, connecting, and serving.

You have an Apple-like ecosystem, everything is designed beautifully to plug together and work together. We recruited Benjamin Lyon from Apple to run engineering. He was at Apple for 22 years, he was responsible for much of what you use in your iPhone. That’s the kind of design thinking that we’re applying here.

VIA SATELLITE: Of the 50 contracted launches, what’s the mix between commercial and government? And what type of demand are you seeing in both areas?

Kemp: The mix is about 50/50 today. We’re seeing a lot of demand in both areas. We’re seeing a tremendous amount of new activity from new companies and existing companies. There’s never been more capital being invested in small satellites. The government has been doubling down on their small satellite programs, both in civilian and defense, and in other areas. NASA TROPICs and NASA VCLS [Venture Class Launch Services] are great examples. We were honored and humbled to win those and to beat some incredible companies like SpaceX bidding against us. NASA has seen the production line and talked to the teams. Astra doesn’t beat SpaceX because NASA wasn’t paying attention.

VIA SATELLITE: Why was this the right timing for Astra to go public?

Kemp: We were always going to be a public company at some point. Once we got to space, it was clear we needed to scale the business quickly because there was so much pent up demand. We’ve sold over 50 launches now, and we have a $1.2 billion pipeline behind it. The value of being public became clear to us because we couldn’t grow fast enough. We needed to be able to acquire companies. Being a public company gave us a currency that we could use to not only scale through acquisition, but also hire talent like Benjamin, for example. It was by far the fastest way to give the company the capital that it needed to serve our customers.

VIA SATELLITE:  You mentioned capital to do more acquisitions, can you give any insight into what further acquisitions we might see from Astra?

Kemp:  We’re not being specific about that now. But we’ve said we’re going to do spacecraft. The question for us will be a buy-versus-build decision on all the core technologies in that area. Because we are going public, there’s a really viable “buy” option, whereas everything was a “build” option before.

A year from now, a lot of the most brilliant entrepreneurs, building the best technologies, might be approached by people other than Astra. Bringing the best together is only possible when the best is still out there. I think there will be a lot of consolidation in this market and being the first company to be publicly traded puts us in pole position to pull it together first.

VIA SATELLITE:  Some people have criticized some of the space SPACs for going public before commercial service, which is where Astra is. How would you respond to that?

Kemp: There’s a very wide range of SPACs. There are some SPACs where they’re years away from delivering commercial products, and there’s a lot of technology development that needs to happen. Astra proved the technology, secured 50 launch launches, and is beginning commercial service this summer. As for companies that are pre-revenue, we’re pretty late-stage. We’re scaling production, we have a factory, we have orders, we are poised to start our revenue ramp. I think this is what SPACs are for. Companies at this perfect inflection point, that are about to scale fast, and need capital to do it. Astra is perhaps the textbook example of why this vehicle is perfect.