Stride Deploys 2nd PE Co-Investment in Satellite Refueler Orbit Fab
April 10, 2023
In April 2023, Stride completed our latest co-investment in the Series A funding round of Orbit Fab, a company deploying in-orbit refueling capabilities for satellites. This is Stride’s fourth co-investment and the second in private equity as we continue to expand our focus across the capital structure.In contrast to many space initiatives that are highly risky, expensive, and can take decades to execute, Orbit Fab has a unique solution that creates value for satellite operators by lowering expenses and increasing revenue opportunities.
Satellites require fuel to maintain their orbit and to re-position. To date, they have launched with all the fuel they would ever hold because refueling has not been an option. When a satellite runs out of fuel, it is de-commissioned, wasting large sums of invested capital on assets that would otherwise have years of useful life remaining. Refueling increases returns on investment in satellite constellations, reduces expensive launch costs associated with large fuel payloads, and enables new service offerings due to their extended life and/or greater mobility.
Informed by our investments in public credit and equity markets, we anticipated there could be a drying up of venture capital last year, opening up some interesting opportunities. Orbit Fab interested us because the management team had developed several innovative ways to lower their capital needs in what we believe may be a challenging environment to raise equity. The company currently faces little competition and has a first mover advantage with high barriers to entry. The platform they are building serves a wide range of clients, including government players that tend to offer favorable payment terms and be more recession-proof. While Orbit Fab creates substantial value today, their platform also has many other possible business extensions that can grow with space commerce.
Orbit Fab also has received investments from strategic aerospace leaders Lockheed Martin and Northrop Grumman (notably their first time investing together) and contracts with SpaceWERX (the innovation arm of the U.S. Space Force), DIU (the Defense Innovation Unit of the U.S. Department of Defense), and Astroscale, among others.
We are thrilled to be partnered with Orbit Fab on this exciting opportunity. We believe the investment represents a valuable addition to Stride’s portfolio and may well offer add-on investment opportunities for Stride and our investors as their business grows.