Varda Space Industries completed a $187 million Series C funding round in July, lifting the total capital haul for the space startup to $329 million. Natural Capital and Shrug Capital led the fundraiser, with participation from Founders Fund, Peter Thiel, Khosla Ventures, Caffeinated Capital, Lux Capital and Also Capital.
The El Segundo, California-based life sciences company is building prototype in-space laboratories to explore manufacturing in microgravity and then testing hypersonic reentry technologies with their proprietary spacecraft. It launched its first mission in 2023 and has completed three successful launches and safe returns. A fourth mission is now in orbit, with a fifth scheduled for launch later this year.
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These orbital labs are the first to process materials outside the International Space Station. Varda says it marks the beginning of commercial expansion into low Earth orbit, explaining that active pharmaceutical ingredients in medicines crystallize differently in microgravity, creating "novel drug formulations." It believes these compounds can generate highly profitable intellectual property through patents.
The company builds its proprietary launch and reentry components in-house and is working with government partners to study the effects of hypersonic travel on space subsystems. It hopes to develop new technologies that yield profitable generations of thermal protective materials, navigation, communication, sensors and other essential space parts.
Varda CEO Will Bruey says the cash infusion will be used to "increase our flight cadence and build out a pharmaceutical lab that will deliver the world’s first microgravity-enabled drug formulation.”
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It has built a new 10,000-square-foot laboratory space in El Segundo and opened an office in Huntsville, Alabama, home of the Marshall Space Flight Center. Varda says the lab will "allow its pharmaceutical scientists to begin working on developing processes to crystallize biologics, such as monoclonal antibodies." This is an enormous market, valued at $233.19 billion in 2024.
“Our new lab space is an investment in our belief that in-space pharmaceutical manufacturing will drive the foundation of the orbital economy,” said Varda Chief Science Officer Adrian Radocea. “By expanding, we can support work on more complex molecules and ultimately increase cadence to achieve the turnaround times the pharmaceutical industry expects.”
According to logistics firm Craft, Varda faces competition and regulatory issues in its quest for products and profits. United Launch Alliance, founded in 2006, already makes spacecraft and launch vehicles for the government and private enterprise. SpacePharma, established in 2012, provides microgravity research services for orbital drug development. Other competitors mentioned by Craft include Gilmour Space Technologies and Dragonfly Aerospace.
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Even so, the latest show of confidence by Varda investors highlights the enormous profit potential. Lead investors Founders Fund and Lux Capital have been on board since the $9 million December 2020 Seed round. A $42 million Series A round in July 2021 and a $90 million Series B in April 2024 preceded the most recent Series C cash haul.
“Through multiple flights, the Varda team has proven a repeatable orbital-reentry capability, attracted serious DoD demand, and is now turning that momentum toward a world-class crystallization lab," said Natural Capital General Partner Ravi Tanuku in a statement, adding it will "unlock microgravity manufacturing for life-changing medicines and other high-value materials.”
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