[[Home|🏠]] <span style="color: LightSlateGray">></span> [[Interviews]] <span style="color: LightSlateGray">></span> March 1 2021 **Insider**: [[Peter Beck]] **Source**: [Yahoo Finance](https://www.youtube.com/watch?v=jepTLfObPuI) **Date**: March 1 2021  🔗 Backup Link: https://www.youtube.com/watch?v=jepTLfObPuI ## 🎙️ Transcript >[!hint] Transcript may contain errors or inaccuracies. **Host:** Well, SPACs once again are hitting the space industry with Rocket Lab, a rocket company, announcing a deal here and merging with Vector Acquisition, a SPAC focused on that endeavor, in a deal that values Rocket Lab at $4.1 billion dollars in terms of an enterprise valuation and gives a total cash balance now of $750 million dollars once that deal goes through. Importantly, the company has been expanding in both launches on behalf of the government as well as national security payloads. For more on where this company goes from here as the space race continually heats up, getting very intense right now, joining us is the CEO and founder of Rocket Lab, Peter Beck. Thanks again for taking the time to chat here. I mean, we've seen a lot of different companies now start to really raise some serious cash when it comes to building out efforts in space, but how does maybe Rocket Lab look at this differently in terms of what you guys are focusing in on? ### Rocket Lab's Market Position and Strategy **Peter Beck:** Yeah, absolutely. I mean, I guess we're super excited to bring a really high quality asset to the public markets and also partner with Vector Acquisition Corporation through the SPAC merger to do so. But I think what's a little bit unique about Rocket Lab within this industry is, there's certainly a lot of ambition and a lot of grand events, but a little bit shy on execution. And Rocket Lab has continued to execute over and over again. With the small launch vehicle we developed, Electron, we're the second most frequently launched US vehicle and actually the fourth most frequently launched rocket in the world. Part of Rocket Lab's DNA and history is just that solid execution, but not just execution across launch but also execution across spacecraft. So the really exciting thing about this deal is this really enables us to accelerate that not just on the launch side but also on the spacecraft side, and ultimately allow us to create a complete end-to-end platform where customers and service providers can come to us where we can do complete end-to-end pure play within the space sector. ### Medium-Lift Vehicle Development Plans **Host:** Let's talk about how you plan to use the capital raised here. Of course, many of our viewers are familiar with Rocket Lab as a small launch provider, but you've talked about using some of this capital to fund the development of medium-lift launch vehicles. What's the growth you see on that front, and is that kind of the direction that Rocket Lab is going in? **Peter Beck:** Yeah, look, I mean we've always been good at picking the market niches and we picked it with small launch and kind of owned that category. And one of the wonderful things about launching such a variety—and we've delivered 97 satellites to orbit for such a variety of customers—is we know their businesses and we know where everybody's going. If you look at what's actually happening within the industry, over 80% of all the satellites that are going to be launched here in the next decade or so are these bigger constellations. But the one thing that's missing in the industry is a launch vehicle to successfully deliver all of those constellations to orbit. Hence the reason why there's a real need in the marketplace for a medium-lift launch vehicle to service that. ### Path to Profitability **Host:** It's pretty insane to think about kind of the path to profitability here when we're talking about streaming companies still not being able to turn a profit, but you guys have a projection that you'll be EBITDA positive by 2023 after adjustments. Is that more due to maybe the costs falling in terms of your rocket technology and what you guys are able to do, or is it more due to the backlog and maybe pricing power that space companies have here as customers try to tap you guys and others to really get their goals accomplished? **Peter Beck:** Yeah, I mean firstly, we have multiple years of revenue. So when we're looking out here, these are backlogged customers and we have a very clear understanding of both the backlog. But also when we model this, we model in not only the back end but also tops down and triangulate those together to give us some good confidence in those projections. And one of the wonderful things about actually launching and doing it so frequently is it can give us a strong confidence in those numbers. ### Industry Consolidation **Host:** And Peter, you talked about what differentiates Rocket Lab from the competition, but when you look overall in the space, there are more than a hundred small rocket ventures. I have to wonder if this area is right for consolidation. How many of these companies do you think ultimately survive? **Peter Beck:** Yeah, well I mean my personal view here is that there'll be a small group of companies that will survive in small launch and a small group of companies that will survive in the medium to large. And ultimately I think companies will consolidate down to being satellite and launch companies. If you take Rocket Lab for example, we're well known for a small launch vehicle, but we started our space systems division in 2019, and by the end of last year we had one mission going to the moon this year, two missions to Mars, a propellant depot on orbit for NASA. So having both the launch element and also the spacecraft element is hugely important. And as we think about how we grow more in the future, combining those two elements enables us to push into the space applications market. And when I say space applications, that's all the services and data that comes from space to help us down on Earth, and that's where the really large TAMs [Total Addressable Markets] are. So if you have your own rocket and you have your own spacecraft, then your ability to move into those verticals and be very effective in there is very powerful. **Host:** Well, it is fascinating to see the growth and innovation in this space. Peter Beck, founder and CEO of Rocket Lab, it's great to have you on today.