- Privately held Sierra Nevada Corporation (SNC) is creating Sierra Space, an independent commercial space company.
- Sparks, Nevada-based Sierra is 100% owned by husband and wife team, Fatih and Eren Ozmen, Turkish immigrants-turned-billionaires.
- "We envision a vibrant low-Earth orbit economy with fleets of Dream Chaser spaceplanes, a commercial space station, expandable LIFE habitats that can travel to the moon and Mars, and critical infrastructure like power generation, propulsion, and environmental systems," according to an internal email with the announcement viewed by CNBC.
Another company is coming to the commercial space industry, but unlike many of the new start-ups capturing the imagination, this one already touts billions of dollars in business.
And it could potentially be soon courting investors.
Privately held Sierra Nevada Corporation (SNC) is creating Sierra Space, an independent commercial space company with a portfolio that includes, among other things, a reusable space plane and a commercial space station — big bets under development that the new organizational structure is intended to accelerate.
"Our space business is a unique example of our growth strategy. What started as a $40M acquisition has grown its revenue by 10x to $400M today, and will reach $4B within 5-10 years," writes SNC Chairwoman and President Eren Ozmen, in an internal company email circulated on Tuesday and viewed by CNBC.
"To achieve this growth and even greater impact more quickly, today we are announcing our space business area will transition to become an independent, commercial space company... Sierra Space will remain part of the SNC family as a subsidiary and continue deep cooperation and synergy across customers, technologies, and many shared activities."
Sparks, Nevada-based Sierra Nevada Corporation is 100% owned by husband and wife team, Fatih and Eren Ozmen, Turkish immigrants-turned-billionaires, who built once-struggling SNC into a multibillion-dollar defense and national security contractor. Over a decade ago they saw an opportunity to begin investing in space capabilities and technology, personally betting — in much the same way as other deep-pocketed visionaries like Jeff Bezos, Elon Musk and Richard Branson have done — that a new private sector-led space economy could one day lift off.
'Vibrant low-Earth orbit'
The Ozmen vision spans space transportation, destinations, and infrastructure, including in low earth orbit as that opens to commercialization.
"We envision a vibrant low-Earth orbit economy with fleets of Dream Chaser spaceplanes, a commercial space station, expandable LIFE habitats that can travel to the moon and Mars, and critical infrastructure like power generation, propulsion, and environmental systems," states the internal email.
Sierra Space will have the reusable Dream Chaser space plane that's currently under development – a "space taxi" that, designed in part after the Space Shuttle, will be able to land on any airport runway in the world capable of supporting a Boeing 737 aircraft.
Dream Chaser, which was designed with capabilities to carry people and goods, is currently contracted with NASA to conduct six cargo resupply missions to the International Space Station through 2024. Its maiden flight for NASA is expected late next year.
SNC also recently unveiled its commercial space station, an integrated, free-flying prototype for which testing will soon commence at Florida's Kennedy Space Center. The station is comprised of inflatable LIFE habitats that the company has designed for long-duration stays in space, and it is expected to compete for NASA funding in the agency's recently unveiled Commercial LEO Destinations (CLD) project.
In all, SNC's space portfolio totals $3 billion currently in active contracts.
Space investing boom
The creation of Sierra Space comes as commercial space efforts ramp throughout the industry more broadly, as more rocket companies reach orbit, space tourism plans proliferate, and the Biden administration proposes a six percent budget increase for NASA in fiscal 2022.
Investors, too, have been awakening to the sector in a significant way. A growing number of space start-ups have been striking deals to go public via special purpose acquisition companies and Cathie Wood's new Ark Space Exploration & Innovation ETF is on pace to be one of the most successful fund launches ever.
While the company email does not address it, the new structure could create more flexibility if capital were to be raised. It is currently unclear whether and how the Ozmens will court outside investment, but they signaled openness to the possibility in an interview with CNBC's "Squawk on Street" last December.
"We are open minded because we see that bringing in capital is going to allow us to scale up significantly and accelerate our growth," Eren told CNBC at the time.
"We have this vision…we may get there sooner than later…if we leverage some of the capital markets. There is that excitement that one cannot ignore, whether SPACs, I mean valuations are top levels, investment is record levels," added Fatih, who is CEO of SNC, during that same interview.
Tuesday's internal email says the SNC workforce will learn more in coming weeks and months about the steps being taken to transition the space business. It will likely take several months for the new Sierra Space company to truly be operating independently.