Top 3 SPAC Targets – Satellites

With SpaceX’s IPO looming, there has been some concern that its gravitational pull will suck oxygen out of other publicly-traded space companies, and there is some evidence that may already be occurring. Rocket Lab (NASDAQ:RKLB) has tumbled about -24% over the past week and AST SpaceMobile (NASDAQ:ASTS) is down -16.9% over that same period.

Granted, this pair of de-SPACs are coming off of near-record highs and both are still cruising above $100. But, this overall phenomenon could set things up well for SPAC teams searching the cosmos for targets.

Public valuations may be set to be momentarily depressed around this summer’s giga IPO activity, but that could provide an argument in teams’ favor when negotiating valuation with space targets in the coming weeks. And, any SPAC deal negotiated soon could potentially be closing just in time for a broad space market rebound as investors re-diversify.

Now is also potentially a pivotal moment where the space economy is broadening and the race is no longer only about building satellite constellations for communications and imaging, but rather in executing specific tasks in orbit. So, while SpaceX and Rocket Lab can claim to be first movers in some sectors of the space ecosystem, there are still other targets that can stand to claim that mantle for new sectors that are just now coming over the horizon.

Varda Space

One of those new sectors is, perhaps surprisingly, biotech.

Biopharmaceutical research in a zero gravity was one of the main avenues of study that the International Space Station was designed to host. But, with limited space available and long wait times, few commercial drug developers managed to take part in trials aboard the ISS.

Varda Space has been working to expand that market by developing its own microgravity research capsules that can conduct experiments in orbit before safely re-entering. The first of these was launched in 2023 in partnership with Rocket Lab and the company has since launched six missions utilizing its W-series capsules. Five of these have reentered safely with their findings while it maintains one more propriety capsule in space for further data-gathering.

With this consistency established, the company has expanded the types of study it can facilitate. While its first mission grew crystals for the HIV/AIDs drug ritanovir in space, it has since tested experimental hardware modules for NASA and other US government agencies.

Varda’s spacecraft build is now largely done in-house with its heatshields produced at its California factory and its capsules are guided by autonomous software the company has developed internally. By the end of 2026, it expects to increase its cadence to monthly reentries for government and commercial clients.

And, although it has largely managed to vertically integrate its business through a series of private capital raises, a listing could provide a variety of ways for it to accelerate. Its investor base could also be thinking the same as they have reportedly contributed about $643 million to its journey, bringing its valuation to $1.6 billion as of January, according to Dealroom.co.

Starcloud

Starcloud also reportedly crossed into unicorn status earlier this year as it looks to cut in on one of SpaceX’s specific areas of interest – data centers in space.

Last November, Starcloud launched the first Nvidia H100 GPU into space and booted it up the next month as the first satellite to run a version of Gemini in space, where it began training an LLM on its data. Its next mission is designed to place a full GPU cluster with cloud storage in sun-synchronous orbit with the goal of generating low-latency insights on orbital data for commercial clients running space missions.

It plans to place this Starcloud-2 mission in orbit by 2027 and already plans to follow it up with Starcloud-3 and Starcloud-4, which are yet to be scheduled. But, these phases would be designed to provide direct data center support to customers taking advantage of the large-scale solar power generation potential in orbit.

Starcloud has raised a more modest $200 million in private capital so far, but its $1.1 billion valuation puts it in range to consider a move into the equity capital markets. It also has the opportunity to piggyback on the enthusiasm around SpaceX as the two companies have collaborated on several steps of Starcloud’s rollout so far.

Once SpaceX opens up Starship for commercial launches, Starcloud estimates its orbital datacenters will be able to compete with terrestrial ones on price. At that point, SpaceX will likely be a direct competitor for that compute, but Starcloud’s founders have noted that SpaceX will likely be diverting much of its own data center capacity to power other initiatives in the Musk empire.

True Anomaly

As the space domain becomes a more active economic space, it is also sure to gain increasing national security focus as a potential battleground.

True Anomaly has designed its Jackal satellites to be maneuverable in orbit with 20 thrusters propelling them up to 800 meters per second. This is coupled with sensors set up to track other objects in space with room for additional sensory or other mission payloads. And, unlike commercial satellites, the Jackal has been designed to specifically be hardened digitally against electronic countermeasures and physically hardened to withstand attack.

This design caught US Space Force’s attention, which invited True Anomaly last month to be a part of its space-based interceptor program as a group of 12 companies that have been awarded up to $3.2 billion. That program is itself a part of the much larger Golden Dome framework, which could wind up spending over $1 trillion over the next two decades.

The company has been busy on the software side as well as it hones its Mosaic platform that is designed to provide more responsive flight controls for Jackals and other maneuverable satellites with human-in-the-loop AI features. It ultimately hopes that Mosaic could serve as a platform for battle management should things truly kick off between world powers that have space-based assets.

True Anomaly’s capital-raising path has involved both equity and debt, which could be a sign that it would gladly leverage more equity capital if available. For now, its position in the pipeline to join the Golden Dome and its sharply defense-focused approach to the stars have driven its standing valuation to about $2.2 billion.