August 6, 2008
Investment Refuels SpaceX
By Muhammed El-Hasan, Daily Breeze, Torrance, Calif.
Aug. 6--Three days after its third launch failure, Space Exploration Technologies, the Hawthorne-based developer of low-cost experimental rockets, announced a $20 million cash infusion.
Founders Fund, a major technology venture capital firm based in San Francisco, invested $20 million in the private rocket firm dubbed SpaceX.
On Saturday, SpaceX suffered its third launch failure after the second stage of the single-engine Falcon 1 did not separate over the Pacific Ocean.
SpaceX has hundreds of millions of dollars worth of launch orders from government and commercial customers, even though the company has never completed a successful launch.
On Sunday, in an e-mail to investors, customers, fans and the media, SpaceX founder Elon Musk hinted at the Founders Fund investment.
"As a precautionary measure to guard against the possibility of flight 3 not reaching orbit, SpaceX recently accepted a significant investment," Musk wrote.
Musk also wrote that the launch failure will not affect future launches including the next rocket planned for later this year.
"The most important message I'd like to send right now is that SpaceX will not skip a beat in execution going forward," Musk wrote. "We have flight four of Falcon 1 almost ready for flight and flight five right behind that. I have also given the go-ahead to begin fabrication of flight six."
SpaceX also is moving forward with launch preparations next year for its
nine-engine Falcon 9 rocket, which recently underwent a successful test firing, Musk wrote.
In an interview Tuesday, SpaceX spokeswoman Diane Murphy said the Founders Fund investment is an endorsement of SpaceX's potential despite the setbacks.
"The people in the investment business, they are looking for companies that are long-term investments," Murphy said.
Saturday's failed rocket launch carried two small experimental satellites, known as nanosatellites, for NASA. SpaceX also has NASA contracts to develop rockets that can reach the international space station.
Yet it is unclear how more launch failures could affect SpaceX's ability to attract additional contracts and investments.
Musk, who made a fortune in the Internet industry before setting his sights on space, already has invested at least $100 million of his own money into SpaceX.
In November 2005, during a press conference before the second Falcon 1 launch, Musk told reporters: "If we have three consecutive failures, then we probably don't know what we're doing and we should quit."
However, in Musk's e-mail Sunday, he wrote: "There should be absolutely zero question that SpaceX will prevail in reaching orbit and demonstrating reliable space transport. For my part, I will never give up, and I mean never."
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