>> Maria Varmazis: In yesterday's show, we raised the flag of, dare I say it, cautious optimism when talking about the health of the space economy. The operative buzzword being bandied about was, pop quiz, stability. If you can believe it, we're continuing that trend today with more positive news from the space economy. Could it be? Are the clouds parting? Cautious optimism indeed.
>> Unidentified Person: T-Minus 20 seconds to LOA. Go for the floor.
>> Maria Varmazis: Today is July 19, 2023. I'm Maria Varmazis, and this is T-Minus.
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Lockheed Martin bumps up their 2023 outlook. China has reusable rocketry in its sights. Venezuela signs on with the ILRS. NASA earns an A grade. It's a scramble for water at the lunar south pole. And our guest today is Justus Parmar, founder of Fortuna Investments on supporting new space startups. Don't miss it.
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Now let's take a look at today's intel briefing, shall we? And it's always worth reporting signs of positive growth. And today we're hearing from Lockheed Martin that they posted $3.2 billion in sales in Q2 this year, and that's up $341 million, or 12 percent, compared to Q2 last year. In an earnings call, Lockheed Chairman, President, and CEO James Taiclet says this stronger-than-expected sales performance is due to a number of space programs that they're part of ramping up more quickly than forecast. And that includes the SDA's transport layer, Tranche 1, and commercial civil space programs, aka, NASA programs, including the Orion capsule. And that, in turn, is causing Lockheed to revise their 2023 sales and earnings outlook upward. Now there's a phrase I haven't said much this year. Lockheed bumped their outlook up by a little over $1 billion. And now they have an expected range of sales between 66.25 and $66.75 billion for the year. And another company jumping in on the rebound trend is Rocket Lab. CNBC is reporting that the company's stock has doubled this year, following many successful launches in both the United States and New Zealand. Rocket Lab's stocks are up 11.7 percent to trade at a 52-week high of $7.70. And Deutsche Bank reportedly sees it climbing even higher. Are we finally seeing the tides changing in fortune for the space economy? Maybe, maybe, fingers crossed. Time will tell. And now taking a look at China. And China's deputy chief engineer and designer of the country's manned space program has told state media that the country will launch its first reusable rocket in 2027. Yang Liwei told Guangzhou Daily that the new spacecraft will have the capacity for seven astronauts. Yang says the rocket will, quote, also play a critical role in the future construction of China's space station and Moon landing mission. A prototype of the vehicle successfully completed a 67-hour test in 2020. Staying in China, and the director of the Institute of High Energy Physics at the Chinese Academy of Sciences, told the China Media Group that the country's new generation space satellite is progressing steadily. The Enhanced X-ray Timing and Polarimetry Mission or eXTP project is the successor of China's first space telescope, and that was the Hard X-ray Modulation Telescope, HXMT, named Hu Yan, with the new telescope's detection capability expected to be 100 times greater than its predecessor. China has formally signed a new partner on its International Lunar Research Station project. Venezuela is now the fifth country to join this initiative and has signed a Memorandum of Cooperation between the China National Space Administration and the Bolivarian Space Agency of Venezuela on the International Lunar Research Station. The two countries plan to demonstrate engineering implementation; operation and application of the ILRS including a joint demonstration of scientific goals, joint design, and more, according to the memorandum. Now, this isn't a new partnership between the two countries, as they have previously established space cooperation, including the 2008 launch of the VENESAT-1 communication satellite. And while Venezuela looks to the east for space progress, NASA Administrator Bill Nelson is heading to other Latin American countries to rally support for the Artemis Accords. Nelson is heading to Brazil, Argentina, and Colombia to discuss the US Space Cooperation Initiative. Nelson told NatSec Daily, all of these countries have had entreaties from the Chinese government. And, with Argentina in particular, he aims to, quote, keep the ties, the information flowing between our two countries. We will be bringing you our conversation with Robert ion tomorrow on Ecuador's recent signing of the Artemis Accords. So be sure to tune in for that chat. And staying with the US Space Agency, the Small Business Administration announced that NASA earned a top grade, an A, for the sixth consecutive year for its work with small businesses, exceeding its goals by 18 percent. NASA says it has directly invested 3.6 billion US dollars in over 1700 small businesses across the US, creating good paying jobs and opportunities for Americans in all 50 states. And staying with NASA, NASA's Psyche spacecraft is due to launch on October 5, and with less than 100 days to go -- wait. What? A hundred days until October? Where has this year gone? The space agency has provided an update on their progress. The team recently completed a test campaign of the flight software and installed it on the spacecraft, clearing the hurdle that kept Psyche from making its original launch date that was penned for last year. Engineers and technicians have been working tirelessly to ensure that the orbiter is ready to complete its journey, some 2.5 billion miles, to a metal-rich asteroid that may tell us more about planetary cores and how planets form. Except I'm still stuck on that 100-day countdown. But, anyways, moving on. Above Space Development Corporation has announced that it has signed a five-year Umbrella Space Act Agreement with NASA. Above says that this agreement provides them with access to facilities and support for systems testing, technology, and tools and includes collaboration on multiple technologies that Above is testing for commercial, civil, and government customers. And now let's shift our focus to the moon. In the battle for the moon, so to speak, there is one location that everyone's scrambling to reach first, the coveted south pole. Russia is next in line to send a vehicle to the apparently water-rich region of our neighboring satellite with its Luna 25 vehicle now in place at its launch site. Yes, really. This spacecraft is due to take off next month from the Vostochny Cosmodrome and plans to be the country's first soft landing on the moon's south pole. And we do love a story about how space-based technology can enhance our lives here on Earth, and it doesn't get more wholesome than when we can help the agriculture community. Aspia Space has said that they have developed a new tool that harnesses AI and satellite data to enable grassland farmers to remotely measure the height of their grass from space. The company plans to launch the service with farmers in Ireland later this summer. The hyperspace challenge in partnership with the US Space Force's Space Rapid Capabilities Office, known as Space RCO, has released the 2023 Challenge Problem Statement. Hyperspace is inviting researchers and companies with mature technologies to explore innovative ways to enhance the resilience of space assets, including satellites, against threats. Companies from the traditional space and aerospace slash defense industries, as well as those from nontraditional sectors like automotive, manufacturing, and cybersecurity are all encouraged to participate. Companies have to submit an initial interest form by August 15. And we will be speaking to Kelly Stafford from Hyperspace Challenge and Matthew Fetrow from Space RCO in the coming weeks. So stay tuned for that. And, as always, we have a number of great reads in our selected reading section in our show notes for you. There's a great piece in there today from the Center for Growth and Opportunity at Utah State University that gives a succinct overview of the regulatory landscape in the United States for the space domain. And that regulatory landscape, it's disjointed, to say the least. And there are numerous challenges ahead for Congress as they try to navigate these regulatory waters. It's a frequent topic of discussion with our guests on this show. And the article also does a really nice job of kind of laying it all out for you, so definitely give it a read. We've linked it for you over at space.n2k.com.
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And that wraps it up for our intel briefing for today. Hey, T-Minus crew. If you find this podcast useful, and we really hope you do, please do us a favor and share a five-star rating and a short review on your favorite podcast app. It'll help other space professionals just like you to find the show and join the T-Minus crew. Thank you so much. We really appreciate it.
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Our guest today is Justus Parmar, founder of Fortuna Investments. Fortuna recently entered the space economy. And we started our conversation by asking, What's been the draw for Fortuna to invest in space?
>> Justus Parmar: We're early stage investors and long-term partners to a number and variety of companies. We've developed a tremendous track record for success in other emerging areas and industries. Quite famously, we really made a name for ourselves back in 2016. And that's when Tesla was actually really just beginning to take off. And, in those days, Elon was only selling maybe 60,000 cars a year. You know, he's selling upwards of 2 million now, just to give you a little bit of perspective. And so we -- you know, understood this electrification of the world, and we really started to dig deep. And what we realized was, it's these lithium ion batteries that were powering this whole revolution. So we stepped up. We founded, we cofounded several different early stage companies in that arena, several of which actually went on to be over billion dollar companies, unicorns. We like to think of ourselves as futurists, in a certain way. And so, come to space, all these things beautifully aligned. And we love the prospect of this brand new space economy that's starting to emerge.
>> Maria Varmazis: Yeah. And it's -- right now is a very interesting time for the space economy. We had sort of the feeding frenzy in 2021. And now people are saying it's a correction or however you want to interpret that, although I'm very interested to hear your interpretation of what's going on. So now is a tricky time, or maybe it's a great opportunity. I'm curious to hear your thoughts on why right now as opposed to maybe a few years ago.
>> Justus Parmar: For us, I think we avoided maybe some of the pitfalls over the last couple of years. We were monitoring the industry. It was a little bit kind of buoyant or overly buoyant in a certain way. So we were doing our homework. We're monitoring the industry. And then -- and then two things happened. One, we witnessed the worst overall stock market crash since 2008. So that's the worst crash in the last 15 years, more than 15 years in the overall markets. Within the space industry, by nature, a lot of the companies are, you know, earlier by nature, they're not fully developed. And so, when you have a market crash and then you compound that with growth, and most stock aerospace investments are in the growth industry, you've kind of got a double whammy or a compounding effect to the downside. And so I and we at Fortuna, we think this is absolutely the perfect setup to go shopping. Everything's on sale. Everything's 80, 90 percent off. So it's almost like a kid in a candy store in a certain way that, you know, we're kind of coming off the bottom. We at Fortuna predict the market, the stock market, overall stock market to be performing tremendously well into next year, reason being, US presidential year, trillions of dollars of capital sitting on the sidelines, record low unemployment. It looks like we've seen peak rates. You know, we might raise it one or two more times. You add all these things up, it's going to be a bounce back year. I mean, we're already starting to see that bounce in a lot of the equities that were really hurt. And so it's the perfect setup. It's a once-in-a-lifetime opportunity or setup to really start to look and fund and back and build some of these, you know, world-class, you know, once-in-a-generational type of opportunities. And I'll end by saying we just actually made our first significant investment into a company called Starfighters Aerospace.
>> Maria Varmazis: Yeah. Tell me more about that. I was just going to ask what interests you? What are you looking at?
>> Justus Parmar: You know, our team gets pitched three, four, or five different times every day from various different space opportunities now. I think the launch obviously gets a lot of the sizzle. It's sexy. It aesthetically looks good. You know, Elon's, you know, in the game. Jeff Bezos is in the game. So, you know -- but, overall, it's only composing about 12 percent of the entire marketplace. Right? And obviously satellites are 70 and the miscellaneous things. And so, you know, we at Fortuna, we've made our first significant investment. Our strong preference is the company's out of convert -- into commercialization. So it's not just two guys with a backwards hats and like a PowerPoint. It's a little more difficult. You laugh but --
>> Maria Varmazis: No, no, no. I -- listen. I live near MIT. I completely understand why you want to picture your painting. Yes. Please continue.
>> Justus Parmar: And no disrespect to backwards hats.
>> Maria Varmazis: No, no, no.
>> Justus Parmar: The point is that it's a little bit too much on the risk curve for us, per se. So what we -- you know, our holy grail is, you know, we're not looking for a SpaceX or, you know, something that's got 100, 200 terarats [phonetic], you know, something that's got hundreds of millions of revenue. We're just looking for something that's like -- you know, that's got a semblance of a formed company. They've got a product. They've got into commercialization. You know, they're doing some -- you know, maybe a couple million dollars revenue or something that they believe they've proven. And we'd love to be that growth capital that comes in there for 10, 20, 30, up to $50 million to really help to accentuate that company's growth profile. Yeah.
>> Maria Varmazis: I'm so curious. I don't know if there's a right answer to this question, but I'm curious about your take. Is it more important that this company has the tech nailed or the business model?
>> Justus Parmar: The one thing that I guess I've noticed is there's -- and, again, I say this. I come from other industries, you know, clean energy, battery technologies, life sciences, you know, amazing people in every industry. But in this particular industry, it's really, I've noticed, academia forward. And so you've got some brilliant, brilliant academic minds. And maybe sometimes they're just -- they're missing that kind of component of that business side of things, right. And so if you -- you know, if you look at -- call it the best of the best. Look at the Elon Musk's of the world in the space industry, yeah, he's an engineer. But also he's done economics in university, and he's built companies, right. So it's not just the technical side. He understands how to market. He's the best promoter in the world. And so it's marrying those two collectively is obviously the holy grail. That said, us at Fortuna, you know, I think we're quite good at business. We don't mind actually carrying a chunk of that business load just because we're so good at it. And so, for some of the entrepreneurs, I think it makes it easier in a certain way if they realize they've got a good partner who can, you know, not do everything but really, you know, help where need be on strategic advice or growth or allocation of money and things of that nature.
>> Maria Varmazis: Yeah. That makes a lot of sense. I -- it's a question I like to ask because there is, in the space world, as a person coming in from the outside, I've noticed a lot of emphasis on the tech. And the business model seems to sometimes -- like, I'm not an expert. But it seems to me sometimes it's more of an afterthought, and I wonder if that can be a --
>> Justus Parmar: Well, and that's just it. And I think that's why some of the -- you know, I know some of the VCs kind of stay away from this whole industry because it's -- there's not necessarily that pathway to profitability, right? So it's like, okay. Cool ideas. But how do we make money in this endeavor? And so I implore the entrepreneurs who are listening at home and the folks that have a chance to listen to this just I can't emphasize it enough. Don't disregard the business and how am I going to make money on this.
>> Maria Varmazis: It matters. If you're talking about commercial space, it's literally the game. Yeah. That's -- it matters a lot. And now I'm going to, I'm going to ask the inverse question. What kind of tech are you interested in? Because this is the nerdy side of me. It's like, okay. There is a lot of cool stuff happening.
>> Justus Parmar: I mean, I like to kind of think of it in the way that you know, back -- maybe I'm dating myself a little bit. But like, you know, back in 2000 when dial up internet and modems are really starting to take off and they had the clunky Motorola phones and who would have known what, like, if you'd asked myself 20 years ago, would you think that the smartphone was going to control every single aspect of humanity, probably not, right? And I think we're starting to operate on that trajectory. Obviously, we're not there yet. But we could be on the precipice of something so outstanding such as that because we're already -- I mean, if you look at it, Maria, in a certain way, we're already touching outer space on almost everything, whether -- it's already a $200 billion a year US business. It's going to a trillion. I think that the shortcoming is people just can't see or visualize it. And, again, that's also one of the reasons that really attracts us to this industry because we kind of want to be there before the whole crowd is there because then everything gets really messy, really crowded, valuations go ballistic. And so what we at Fortuna, we're really trying to lay some of this infrastructure and groundwork so we can have a dozen significant investments over the next three years. Yeah.
>> Maria Varmazis: Anything particularly of interest that you're like, yeah. That's going to be cool.
>> Justus Parmar: Yeah. So a couple areas, right. So we're already in the launch game. We're on the small side of the SAP market. Our company, Starfighters, is going to be operating on a smallest side of the market there. You know, we realized technology is getting smaller and smaller with the CubeSats, Nanosats. It's a little bit underserviced in a certain way. Things that quite intrigue me are the possibilities of solar in outer space. And I just say that because, you know, we've got a background in clean energy, renewable energy. We've got solar investments here in the US, battery investments. And so just to like conceptualize the fact that, you know, when the Sun's rays are actually beamed down through the atmosphere, it's extremely diluted product that we get at the end of the day. And to actually have a cluster or have solar satellites in outer space, they're literally going to be 1000 or 10,000 times more powerful. And so from an energy source, it just that screams that it's going to be feasible. Obviously, the million or billion dollar question is going to be how quick can that be flushed out and when that will be operational. But I think things like that seem to make sense. You know, we're actually looking at one particular refueling company at the moment. Why not be able to refuel in outer space to carry on missions to go to Mars, do things of that nature. So, for me, it's a conceivable next step. I mean, we're not even there with the first step, but it's just a natural progression in a certain way, almost like how electric cars are now becoming prevalent, but we still have a charging shortfall on Earth.
>> Maria Varmazis: As an EV driver, I feel that acutely. So, yeah. We are on that really interesting cusp of really cool stuff is about to happen. And, you know, in space, ISAM -- I always mess up what the acronym means but, you know, in space servicing, assembly, manufacturing, right, ISAM, right, so much good stuff that's sort of on the cusp of happening there. I'm just so looking forward to that, like, exploding. And it's starting to boil over. It's going to be really cool. I know we're coming up on time, and I know your time is precious. So I want to give you the floor. If there's anything we haven't touched on that you wanted to, I want to make sure I give you that opportunity.
>> Justus Parmar: I appreciate that. Thank you, Maria. I've had a great time. And maybe the one point I would love to touch on just given that I believe the segment is investing in space, so I think that there's several or many folks at home that are trying to figure out, you know, how should I play this? Should I play this? Is this too risky? You know, questions of that nature. And what I'll say is, you know, people often tell me it's really risky to be investing in outer space. And I agree with that, a certain aspect of that. But I would actually give you the alternative view which is it's actually riskier not to be investing in outer space at this current moment. And so there's different ways to maybe dabble and kind of look at the industry instead of -- again, you don't have to bet the farm. But, you know, a little bit of exposure maybe just so you can hopefully capitalize on the upside as this industry really starts to mature.
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>> Maria Varmazis: We'll be right back. And welcome back. And so many phrases in the space domain honestly sound perfect for screen and stage, don't they? Take, for example, the overview effect, which you might be familiar with from my interview with author Frank White just a few weeks ago. He coined this phrase, the overview effect, to describe the cognitive shift seen in astronauts after they view the Earth from space. And now that phrase is also getting the dramatic treatment in a new stage play called The Overview Effect by playwright Lynn Rosen, and that plays making its world premiere right now at the Contemporary American Theatre Festival at Shepherd University. Here's the play's synopsis. A showdown between competing space companies, each on a quest for Mars, ends in disaster with the explosion of RedSky's unmanned rocket. As air disaster expert Dylan Marks searches for signs of sabotage, her investigation becomes deeply personal and ultimately life changing. This epic tale explores the costs of risk-taking -- scientific, emotional, and spiritual -- and asks, do we know all the ways there are to be alive? And as that synopsis ends, the play draw some inspiration from the competing billionaire enterprises in new space. And it also draws inspiration from Cassini, the spacecraft that studied Saturn for over a decade. And it's also a central figure in this play. But, really, as the title suggests, it's about the perspective shift experienced by the characters and getting comfortable with not having all the answers. Or, as the main character Dylan says at one point in the play, Sometimes we get Earth and the Milky Way and Saturn's rings, roses, elephants, oceans, children who love us. And sometimes it's a disaster, and we don't know why. The play The Overview Effect by Lynn Rosen is currently running through the end of July at the contemporary American Theatre Festival at Shepherd University in Shepherdstown, West Virginia, which is about an hour and a half drive for any of our listeners who are in the DC or Baltimore areas. If you get a chance to go, please drop us a line about how it is. I'd love to hear more about it. And I'll read your review, and we'll share it on the show.
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That's it for T-Minus for July 19, 2023. For additional resources from today's report, check out our show notes at space.n2k.com. We'd love to know what you think of this podcast. You can email us at space@n2k.com or submit the survey in our show notes. Your feedback ensures that we deliver the information that keeps you a step ahead in the rapidly changing space industry. N2K's strategic workforce intelligence optimizes the value of your biggest investment: your people. We make you smarter about your team while making your team smarter. This episode was produced by Alice Carruth, mixing by Elliott Peltzman and Tré Hester, with original music and sound design by Elliott Peltzman. Our executive producer is Brandon Karpf. Our chief intelligence officer is Eric Tillman. And I'm Maria Varmazis. Thanks for listening. We'll see you tomorrow.
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