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Sierra Space increases total investment to $1.7B with $290M Series B Funding
This latest funding adds further momentum to Sierra Space's growing partnership network in Japan, including the exploration of Oita Airport as a landing site for Sierra Space's Dream Chaser spaceplane - with partners Oita Prefecture, Kanematsu and Japan Airlines, a burgeoning partnership with Mitsubishi Heavy Industries to develop a wide range of technologies to orbit and on orbit.
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Sierra Space increases total investment to $1.7B with $290M Series B Funding
by Staff Writers
Louisville CO (SPX) Sep 28, 2023

Sierra Space, a leading pureplay commercial space company building the first end-to-end business and technology platform in space with $3.4 billion in customer contracts, announced today it has closed a $290 million Series B funding round. The round brings the company's total capital raised to $1.7 billion, the largest ever capital raise by a commercial space company over the combined Series A and B rounds. This latest milestone elevates Sierra Space's valuation to $5.3 billion and reaffirms the company's position as a leader in the new global space industry.

With this latest private capital infusion, Sierra Space expects to forge critical global partnerships and accelerate plans to build a transformational space tech ecosystem that will revolutionize the space economy of tomorrow. The company is currently transitioning the Dream Chaser spaceplane from years of development to recurring mission operations for NASA cargo resupply flights to the International Space Station (ISS). The company has been in development of the first commercial space station for five years, successfully achieving several hardware design and testing milestones; full-scale testing is due by the end of this year. The program maturity cements Sierra Space's position as the industry leader in business-ready commercial space station development for use in Low Earth Orbit (LEO) and in deep space.

"Sierra Space is excited to create a long-term strategic relationship with our Japanese investors and industry partners," said Tom Vice, CEO of Sierra Space. "As we transition our revolutionary Dream Chaser spaceplane into operations for NASA cargo resupply missions to the International Space Station, we focus our capital deployment to the development and operations of the first commercial space station - the next step in our in-space infrastructure - the growth of our national security offering and scaling our space systems components business."

The round is co-led by Japan's largest bank, MUFG, Kanematsu Corporation, a Japanese trading company and Tokio Marine and Nichido Fire Insurance, Japan's largest property and casualty insurance group with participation from Sierra Space's existing investors. The companies are already participating in a JAXA (Japanese Aerospace Exploration Agency) study to explore how to conduct activities in LEO as the ISS approaches the end of service.

"MUFG aspires to help all our stakeholders take the next step forward, and we believe this should serve as the starting point for all business activities. Sierra Space Corporation's aim to build a platform in space that will benefit life on Earth is the very embodiment of this concept, and MUFG has decided to invest in Low Earth Orbit to support commercialization, the creation of new industries, and the resolution of social issues. In the future, MUFG, alongside Kanematsu, Tokio Marine and Nichido Fire Insurance, and Sierra Space, will not only contribute to the regional economy of Oita Prefecture, but also create social impact in Japan and throughout Asia," said Junichi Hanzawa, President and CEO of MUFG Bank, Ltd.

This latest funding adds further momentum to Sierra Space's growing partnership network in Japan, including the exploration of Oita Airport as a landing site for Sierra Space's Dream Chaser spaceplane - with partners Oita Prefecture, Kanematsu and Japan Airlines, a burgeoning partnership with Mitsubishi Heavy Industries to develop a wide range of technologies to orbit and on orbit.

A family of reusable spaceplanes, Dream Chaser has three variants leveraging flexible design and performance versatility to address cargo, crewed or national security space requirements across domestic and international commercial, civil government and defense customer segments. The Dream Chaser is capable of transporting crew and cargo to and from LEO and facilitating a 1.5 low-g landing on compatible commercial runways around the world. Dream Chaser is backed by a NASA contract to perform cargo resupply missions to the ISS and in conjunction with the company's Space Technologies business, contributes to $3.4 billion in active contracts.

Citi acted as private placement agent to Sierra Space on this Series B transaction.

Strategic Agreement between Sierra Space Corporation, MUFG Bank, Kanematsu and Tokio Marine and Nichido Fire Insurance
Sierra Space , MUFG Bank, Kanematsu Corporation, and Tokio Marine have concluded a strategic agreement in the Asia-Pacific region, and MUFG Bank, Kanematsu, and TMNF have decided to make a strategic investment in Sierra Space. Through this partnership, we will contribute to the commercialization of Low Earth Orbit [1], the creation of new industries, and the enhancement of life on Earth.

Sierra Space is a leading commercial space company that is building a platform in Low Earth Orbit - space stations and transportation systems to and from Earth - and will soon launch the first of an initial seven resupply missions to the International Space Station (hereinafter ISS [2]) under a multibillion-dollar NASA contract with its next-generation Dream Chaser spaceplane [3]. Early this year, NASA awarded a Space Act Agreement to Sierra Space, providing support to a "pathfinder" space station, which will serve as a technology demonstration for key elements of commercial space stations.

Sierra Space is considering the use of Oita Airport as an Asian hub and spaceport for Dream Chaser, which is expected to have an economic ripple effect of about 350 billion yen in Japan as a whole and about 35 billion yen in Oita Prefecture [4]. In addition, Sierra Space's end-to-end business and technology platform is expected to use the microgravity environment of Low Earth Orbit for innovations in the field of life science, academic scientific experiments in the fields of materials and physical chemistry, drug discovery and other applications, as well as entertainment.

In October last year, the four companies announced joint participation in JAXA's "Feasibility Study for Sustainable Space Environment Utilization in Low Earth Orbit" to discuss how to conduct Low Earth Orbit activities after the ISS retirement and how to conduct Low Earth Orbit activities after 2025, including extending the ISS, and to propose new solutions and business models.

Under the strategic partnership, MUFG Bank, Kanematsu, and TMNF will participate in the commercialization of Low Earth Orbit led by Sierra Space, thereby further expanding the supply chain of the Japanese space industry and creating new industries. We will also broaden our efforts to develop the space industry by bringing together all the companies who can participate in this initiative.

[1] Refers to the area where the ISS (altitude 400km) is active, between 200km and 1000km.

[2] The ISS is scheduled to operate until 2030. There have been discussions, mainly in the United States, on how to conduct business on commercial space stations owned and operated by private companies following the ISS retirement.

[3] A reusable space plane developed by Sierra Space. Operation of resupply missions to the International Space Station will begin in late 2023/ early 2024. Manned aircraft are also expected to start operating in the second half of the 2020s.

[4] Estimation of Mitsubishi UFJ Research and Consulting Co., Ltd.

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