How Canada Rocket Company plans to fill a void left by SpaceX

Founder Hugh Kolias said that Canada Rocket Company is on track for its next major funding round this year and that they have had success raising money in Canada. Photo by Handout/Canada Rocket Company

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Canada Rocket Company is developing a medium-lift launch vehicle powered by methane and liquid oxygen — also known as methalox — capable of taking a 12,000 kilogram payload into low-Earth orbit, a strategy that it hopes will make it the Canadian alternative to SpaceX’s Falcon 9 rocket. The Falcon 9 has long been the primary carrier of medium-lift payloads, but has stopped taking launch bookings past 2028 as SpaceX focuses on its next-generation Starship rocket.

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CRC launched this January with a $6.2 million seed round in tow, and has since raised a total of $22.5 million from mostly Canadian investors — including the Business Development Bank of Canada, Ripple Ventures Fund GP Inc. and Panache Ventures Investment Fund — with more on the way.

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“There’s been a ton of investor interest at home and abroad specifically because of the global shortage. Everyone sees it coming,” said CRC founder Hugh Kolias.

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The scarcity of launch access coupled with booming government and investor interest has converged to create a “space super cycle” that has benefitted his company, Kolias said, but CRC still has a long way to go before sending a rocket into orbit.

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Developing and sending a medium-lift vehicle into orbit costs at least US$500 million, requires 300 to 500 engineers and technicians and takes eight to ten years, he said.

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CRC has made swift strides on the first two goals. Kolias said the company is on track for its next major funding round this year and that they have had success raising money in Canada.

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“It’s not that we didn’t look to the United States,” Kolias said. “It’s just that there is overwhelming demand in Canada, so we are able to effectively keep it in Canada. There’s a very rare opportunity now to raise as much of this capital (here) that you probably couldn’t have twelve months ago.”

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CRC has also started recruiting technical talent, including repatriating nine Canadians from industry giants such as SpaceX, Jeff Bezos’ Blue Origin LLC and Europe’s ArianeGroup Holding, growing its team to 25 as of July from just two in January.

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Government support has also helped. Ottawa has removed bureaucratic hurdles for the company, including some that have allowed the startup to hire the temporary foreign workers needed to progress on its technical goals, in addition to topping up its war chest.

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Earlier this year, the federal government awarded $8.3 million in grant funding to CRC — and the same amount to its peers NordSpace Corp. and Reaction Dynamics Lab Inc. — under the Department of Defence’s $105 million, multi-year sovereign launch program to develop technologies to launch Canadian payloads from Canadian soil.

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Still, Kolias said, the company needs government support in the form of contracts to prove the reliability of its technology and to succeed commercially.

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“The private market is looking to the government for the demand signal and the appetite for something this ambitious to be built. Investors are also looking for public capital to de-risk a binary outcome: either you get to orbit or you don’t,” he said.