How Gilmour Space Technologies is competing with SpaceX, Blue Origin, and Virgin Orbit to send startups into space

In the early twenty-tens, when Gilmour Space Technologies co-founders, and brothers, Adam and James Gilmour spoke of their plans to found an Australian business that would send satellites to space, people said they were crazy.

“And the people who didn’t think we were crazy, thought it was impossible,” Adam Gilmour, who is now CEO of the company, recalls with a laugh.

“There are still people who think what we’re doing is impossible, but that’s vastly changed over the last couple of years.”

Next year, if you’re lucky enough to be in Bowen, Queensland at the right time, and pending no setbacks, you might catch a glimpse of a small rocket, making its way to space.

It’ll be a rocket sent to space by an Australian company, that in a way, is a family business; James is head of launch operations, and Adam’s wife Michelle Gilmour is head of marketing and communications. But it’s operating in a sector dominated by tech titans like Elon Musk’s Space X, Jeff Bezos’ Blue Origin, and competing with Richard Branson’s Virgin Orbit.

Gilmour Space’s rockets are intended to deliver up to 305kg of payload, usually small satellites, to low Earth orbit (LEO).

At face value, it’s competitors have enormous advantages. Proximity to established space industries and venture capital firms with access to larger pools of funds. Not to mention the backing of billionaires. So what gave its co-founders the confidence to proceed anyway? Gilmour’s answer is relevant to all types of business: careful planning and knowing what your customers need.

“The bigger companies are building bigger and bigger rockets,” Gilmour says.

“The target market for the vehicles that go in those rocket is incredibly small. It’s basically lunar and Mars missions.”

By way of comparison, Space X’s Falcon 9, which has delivered a payload of 15,600kg to LEO, stands 70 metres high. Gilmour Space’s Eris orbital launch vehicle, which the company expects to launch next year, stands 25 metres tall.

“Small satellite constellations want to get to very specific places in space,” Gilmour says.

“They don’t want a rideshare or piggyback ride on a big rocket going to one particular place in space. The market thesis is with smaller rockets, you can take six small satellites up and put them exactly where they want to go. And that’s exactly what customers want.”

Gilmour likens it to commercial air travel. Sure, the Airbus a380 can carry more passengers than any other commercial airliner. But the reality is people want to visit lots of places, and the most economical way to do that is with smaller airplanes.

“So there’s probably 40-80 companies that are putting up prototype satellites on big rockets to test them,” Gilmour says.

“It doesn’t work to take a whole lot of satellites up to one place in space, because they don’t want to be there.

“So these companies are chomping at the bit, waiting on the sidelines for other small rocket launches to get up and start flying regularly to space.

“When two or three companies can do that, that’s when you will really see the pickup in the space industry that everybody’s talking about.”

Deadlines, contingencies and hiring

Morgan Stanley estimates the global space industry revenues could grow by $650 billion in the next two decades. In 2020 Australia’s slice of that revenue was $5.7 billion. The Australian Space Agency aims to grow the sector to $12 billion by 2030.

Despite the considerable complexity that comes when your business is literally rocket science, Gilmour says there are still lessons other businesses can draw from his experience. Namely making tough choices to ship products.

“It’s very easy when you’re developing a complicated vehicle, to continually think of a better way to do it,” he says.

“But then you get into almost a death spiral of continually changing the design. So we have to use a lot of discipline during the design stage, to say there’s a deadline by which you cannot make a design change for the first two vehicles. If you come up with a better way of doing it, it’s got to go on a future vehicle.

“We have to do that, otherwise we’d never get to space.”

Gilmour says would-be business founders should start with a plan, be willing to adapt, and be prepared for it to take more money, time, and people than you might initially expect.

“Looking back I underestimated how long it was going to take and how many people I would need. You probably need to take what you think you will need, and multiply it by three,” he says with a laugh.

Finding talent in the beginning was tough. But Gilmour Space shows it’s possible to attract talent to Australia, even when you don’t have an established industry to lean on. Australia was one of the first nations in the world to build and launch its own satellite, when it did so in 1967. However, around the time of the Gilmour Space’s founding in 2013 Australia’s space sector had waned so much that it bordered on non-existent.

“It’s been incredibly difficult — there’s no rocket industry here,” he says.

During that important planning phase, Gilmour noted that rocket engines take the most time to develop, so the first people the company hired were rocket engineers.

“That was a good move and we built the rest of a team around that. If you read about the founding of Space X, Elon Musk basically pulled rocket engineers from all of the other rocket companies in America and was able to hit the ground running,” Gilmour says.

“We couldn’t do that. So we had to start from absolute scratch. But in the last two or three years we’ve been quite successful hiring international rocket engineers into Australia. They’ve been attracted to coming and working here on the Gold Coast.”

The team at Gilmour Space. Source: supplied

Investors calling

Last month Gilmour Space Technologies announced a $61 million Series C funding round, from US-based Fine Structure Ventures, Australian VC firms Blackbird and Main Sequence, superannuation funds HESTA, Hostplus and NGS Super, and the Queensland Government through its Queensland Investment Corporation and Business Investment Fund. It takes the company’s total funding raised to $87 million.

Prior to that raise, the team had fielded calls from investors as the COVID-19 pandemic took hold in the middle of last year, who suggested slowing down spending until capital markets opened up again in 2021.

“So we basically knuckled down, but by Christmas or January it looked like things were really good. All of the space companies started to lift off and investors shone their lens on us,” Gilmour says.

“My advice to founders, is when you’re planning out the journey, have a lot of stages along the way. And when you’re raising money, be very good at explaining how those stages add up to success at the end.

“Make sure you can very confidently hit these milestones before you run out of money. Because that’s what investors look at. Did you hit the milestones before you ran out of money? And if you hit the milestones, they’ll give you more money. You have to nail that.”