Blue Origin, Jeff Bezos’s rocket company, is opening its doors to outside investors for the first time in its 25-year history.
The move comes after a devastating setback in which the company’s New Glenn rocket exploded on the launchpad on May 28 during a static fire test.
The New Glenn rocket cost between $100 million and $150 million to build, and its complete destruction dealt a severe financial blow to the company.
Adding to the damage, Blue Origin’s new launch facility, which cost roughly $1 billion to construct, suffered extensive harm in the explosion.
Engineers at the company are reportedly still uncertain about the root cause of the accident, raising concerns about the timeline for any future launch attempts.
Blue Origin is reportedly burning nearly $5 billion per year, a rate that could increase further following the New Glenn disaster.
Bezos has been the sole financial backer of Blue Origin throughout its entire history, but the scale of losses appears to be prompting a change in strategy.
On May 20, just eight days before the explosion, Bezos indicated that conditions were favorable for bringing in new money, saying there was finally “enough visibility into our future and our financial success” to raise funds from outsiders.
He added, “It’s a good time actually to start thinking about the future and bring on some other outside investors,” a statement that now carries added urgency given the subsequent rocket loss.
Any capital raise will almost certainly be limited to institutional investors, with retail investors unlikely to gain direct access to Blue Origin anytime soon.
Blue Origin had not yet filed for an IPO, and analysts who had been speculating about a potential public offering now consider one far less likely in the near term.
Rival rocket company Space Exploration Technologies (NASDAQ: SPCX) presents a stark contrast, having seen its valuation surge above $2 trillion following a successful IPO.
The competitive gap between the two companies has widened significantly, putting added pressure on Bezos to stabilize Blue Origin’s operations and restore investor confidence.
Even if a fundraising round does move forward, it may be more limited in scope than originally envisioned, giving the company time to address its deteriorating valuation before seeking larger commitments.
