bluShift Aerospace

World's 1st Uber-like, Biofuel Powered, Dedicated Small Space Launch Service

Analytics

Raised to Date: Raised: $609,045

Aggregate Commitments $
Platform

Wefunder

Start Date

04/19/2021

Close Date

09/24/2021

Min. Goal

$500,000

Max. Goal

$1,070,000

Min. Investment

$100

Security Type

SAFE

Funding Type

RegCF

Series

Series A

Valuation Cap

$18,000,000

Discount Rate

10%

Rolling Commitments $
Status

Active

Reporting Date

07/31/2021

Days Remaining

55

% of Min. Goal

122%

% of Max. Goal

57%

Likelihood of Max
possible
Avg. Daily Raise

$5,913

Momentum
warm
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Location

Brunswick, Maine

Industry

Transportation, Automotive, Aviation, & Aerospace

Tech Sector

Hardwaretech

Distribution Model

B2B

Margin

Low

Capital Intensity

High

Business Type

Growth

bluShift Aerospace, with a valuation cap of $18 million, is raising funds on Wefunder. It is a commercial rocket company that uses earth-responsible, carbon-neutral, and bio-derived fuel to provide space launch services. The company works as an Uber to space with its suborbital and orbital launch services. Sascha Deri founded bluShift Aerospace in 2014. The proceeds of the current crowdfunding campaign, with a minimum goal of $500,000 and a maximum goal of $1,070,000, will be used towards labor expenses, capital investments, materials and licensing, and other operating expenses. bluShift Aerospace is expected to be cash-flow positive in four years and increase its net margin to 50% in seven years.
Summary Profit and Loss Statement
Most Recent Year Prior Year

Revenue

$135,280

$106,509

COGS

$303,544

$140,764

Tax

$0

$0

 

 

Net Income

$-210,638

$-55,362

Summary Balance Sheet
Most Recent Year Prior Year

Cash

$10,835

$40,623

Accounts Receivable

$3,500

$0

Total Assets

$15,876

$41,456

Short-Term Debt

$24,809

$22,505

Long-Term Debt

$92,929

$0

Total Liabilities

$117,738

$22,505

Financials as of: 04/19/2021
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Ratings

Analyst Report

Synopsis

Satellites are big business. They enable all kinds of modern telecommunications — from cell phones to weather monitoring to GPS. Enabling these tech tools requires an extensive network of active orbiting satellites — 3,372 as of December 31, 2020. More than half of those satellites are owned by the US, with 1,486 in commercial use. This network supports the $278.8 billion US wireless telecommunications market, the $58.9 billion US television broadcasting market, and the $9.4 billion US weather information technologies market. As technology advances, the need for new and better satellites is only going to increase.

Satellites also come with environmental concerns. Launches of rockets are spectacular affairs, but the use of dense rocket fuels can have a disproportionately large environmental impact. Right now, that impact is extremely small simply because there are so few rocket launches, but launches are accelerating at a rapid pace. Now is the perfect time to seek out alternative ways of fueling our launches.

Blasting onto the scene is bluShift Aerospace with a solution to at least part of the environmental rocket problem. BluShift is building rockets to be fired off the coast of Maine that use biofuels instead of conventional emission-generating fuel. The self-proclaimed “Uber to Space,” bluShift plans to provide suborbital — and eventually orbital — services to all manner of customers. The name is presumably inspired by the astronomical concept of “blueshift,” often used in contrast with its opposite, “redshift.” Both are tools used to measure relative motion in astronomy.

BluShift Aerospace’s current Wefunder raise has been rated a Deal to Watch by the KingsCrowd investment team.

Price

As bluShift seeks funds for materials, licensing, and other operating expenses to push towards full launch, the startup is offering a SAFE with a 10% discount rate. For this raise, the company’s valuation cap comes in at $18 million. This amount is somewhat high in comparison to other startups currently seeking funding via crowdfunding. However, it is somewhat supported by the company’s growing revenue. Additionally, the 10% discount rate makes this offer more attractive for investors. Thus, bluShift’s price score is above average.

Market

While satellite launches are incredibly important to virtually all sectors of the global economy, the space launch services market is relatively small, valued at $9.88 billion in 2019. But it’s growing fast, projected to reach $32.41 billion by 2027 at a CAGR of 15.7%. The market, while highly competitive, is not overcrowded. Thanks to a launching point near the North Pole in the state of Maine, bluShift can provide easy access to the North-South orbital paths that 50% of all satellites will need to follow. Balancing the currently small market against its strong growth rate, bluShift scores well in the market metric.

Team

BluShift CEO Sascha Deri holds bachelor’s degrees in physics and electrical and electronics engineering. After a few years in product marketing and management, he started with altE, short for “alternative energy.” AltE provides services to both professional installers and integrators of renewable services and direct consumers of renewable sources. He has led the company for 22 years, giving him ample experience in environmental sustainability. That said, his continued engagement as altE’s CEO could represent a lack of commitment to bluShift.

Chief Technology Officer David Hayrikyan has been with the company almost as long as Deri, though he got his start with the company as a mechanical engineer. Hayrikyan holds a bachelor’s degree in mechanical engineering from Boston University and has spent more than 10 years working in manufacturing. He got his start with A&A Industries as a mechanical and manufacturing engineer, eventually shifting to the startup game when he founded MACABItech as a vehicle for his design work. He still works at MACABItech.

Lead Test Engineer Brook Halvorson holds a Bachelor of Arts in art and the environment and a more recent Bachelor of Science in mechanical engineering from the University of Maryland College Park. He was self-employed for a number of years building cabinets and other furnishings before going back to school for his BS. That move landed him a three-year position with Vorbeck, a small nanotechnology company. At Vorbeck, Halvorson built up his mechanical engineering credentials before joining bluShift in early 2017.

Although this is a series of relatively strong team members with relevant experience, there are no former aerospace engineers or scientists here. This is something of a blue-collar team with a number of practical commitments to other positions. As a result, bluShift’s team score is rather low.

Differentiators

Space launch services isn’t a particularly crowded market. It’s not an especially large one either, though, so it only takes a few competitors for it to feel uncomfortably packed. BluShift is far from the only company seeking to bring sustainable, practical suborbital and orbital rocket launches to market. Elon Musk’s SpaceX is probably the best known commercial launch company, but other competitors include Jeff Bezos’s Blue Origin and Richard Branson’s Virgin Galactic.

To that end, while bluShift hasn’t secured any patents, it has designed its product to conform to customer needs for large payload space and dedicated nanosatellite launch services. And bluShift is fueling its craft differently than most of its competitors, using biofuels that can be sourced from farms all across the world. Breaking into the market is difficult, and low margins require that bluShift cut costs as much as possible, necessitating that it fulfills that vision of becoming the “Uber to Space.”

Performance

BluShift’s profit is still a long way off from a proper launch. It won’t debut its first Low Earth Orbit launch service until 2023. Developing these products takes time. It is quite literally rocket science. That said, the company is relatively far along in the development process. Despite having a long way to go, bluShift has begun to take in revenue: $135,280 last year, up from $106,509 the year before. While it doesn’t begin to make up for even bluShift’s cost of goods sold, and the company has had to take on a total of $117,738 in short- and long-term liabilities, it does enable the company to keep itself on somewhat more stable financial footing. BluShift has garnered support from NASA as well as scientific institutions local to Maine, indicating strong local support.

Risks

BluShift has two serious risks. The first is the team. Leadership’s lack of full commitment to bluShift, while probably practical on a personal level, means they  lack the “all-in” fire that is so often necessary to get startups to succeed. Investors should also note that while bluShift has secured some funding, operations are only going to get more expensive as the product nears full launch, and the company will be offering discounted rates to customers for quite a while afterwards. In seven years, bluShift predicts 50% margins — but even if those projections prove accurate, that’s quite a long way off. Balancing the budget could represent a significant challenge for bluShift as it competes with companies that have far deeper pockets in a quite limited space.

Bearish Outlook

Space launch is an essential service as tech advances, but it is not currently an especially large one. It is a market that takes quite a lot of investment to break into, and even as bluShift has conducted a successful test launch from Loring Air Force Base in Maine, it has quite a ways to go. Investors should keep in mind that bluShift will be operating in the red for a while before generating feasible returns, and the company is up against competitors that are both further along, much better-funded, and fully dedicated to their missions.

Bullish Outlook

Who doesn’t want to own a little piece of outer space? Investors who take a leap and hop aboard with bluShift are doing so at a point where the company is fairly valued. It does have some competitive and ethical advantages over other providers. Its use of eco-friendly biofuels, for example, sets it apart from the competition. Investors should also note that bluShift doesn’t necessarily have to compete on its own. Any number of larger companies inspired by bluShift’s emphasis on nanosatellites and the use of biofuels might seek to acquire the company, providing it an easy exit opportunity. If nothing else, the involvement of three of the richest men in the world in rocket launches demonstrates that many rich men are interested in claiming a bit of this market for themselves.

Executive Summary

BluShift Aerospace is an up-and-coming space launch services startup based in Maine. The company is developing rockets that use non-toxic biofuels to propel them to suborbital and, eventually, orbital altitudes. The startup plans to take advantage of a market that is eager for additional options to deploy satellites and use its location as an ideal launching point for north-south orbital paths for small-scale satellites.

While its mission is well-timed and environmentally conscious, bluShift is up against some big players in this space. In addition, a lack of commitment on the part of leadership and the drastic up-front investments required to build safe and reusable rockets are big challenges for an underfunded team. Still, the tech is well-differentiated from competition, the valuation cap is high but reasonable, and an exit is a very real possibility.

For these reasons, bluShift Aerospace has been rated a Deal to Watch.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Benjamin Potts.

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