Astra wins DIU contract to support Rocket 4 development

WASHINGTON — Astra has won a contract from the Defense Innovation Unit (DIU) worth up to $44 million to support development of its Rocket 4 launch vehicle.

The company announced Oct. 23 it won the contract, which it said would go towards work on various aspects of Rocket 4, a vehicle designed to place up to 600 kilograms into orbit, including “industrialization of Astra’s production facilities.”

The contract is part of a DIU program called Novel Responsive Space Delivery that included previous awards to another launch vehicle company, Stoke Space, and The Spaceport Company, which is developing sea-based launch platforms. DIU said the contract will support “prototyping a solution that will enable responsive and precise point-to-point delivery of cargo to, through, and from space.”

In an Oct. 24 interview, Chris Kemp, chief executive of Astra, said the contract stems from the Defense Department’s interest in mobile launch systems. “What the DoD sees is a number of companies like Virgin Orbit that just don’t exist anymore that had these tactical mobile launch systems. And Astra may be the only one left,” he said. “They really don’t want to see Astra not deliver our new launch system.”

Astra has gone through its own struggles, including funding crises that saw the company flirt with bankruptcy after going public in 2021 through a special purpose acquisition company (SPAC) merger. Astra completed a deal, led by Kemp and co-founder Adam London, to go private in July.

Kemp said that throughout that process Astra continued work on Rocket 4, although it did move some engineers from the rocket to its Astra Spacecraft Engine electric propulsion project. “The teams are continuing to work on Rocket 4, and this just provides additional financial support for them to continue to do so,” he said of the DIU contract.

While the contract has a ceiling of $44 million, the initial funded value of the award is about $2 million, Astra said, a figure confirmed by a DIU spokesperson. Astra said that funding covers the first phase and part of the second phase of a four-phase contract, working on qualification of the stages and key subsystems. As the company achieves milestones on the contract, it expects to unlock additional funding.

Kemp said the company is on a path to attempt a first launch of Rocket 4 by the end of 2025. “I think that strikes the balance of giving the team time to do it right and to work with the Space Force.”

In addition to the DIU contract, he said Astra plans to raise about $50 million in a new funding round. He expressed optimism about doing so despite ongoing challenges facing space companies raising larger funding rounds, citing the $65 million deal to take Astra private. “Nothing was harder than raising the capital to take the company private,” he said, “and that was a very complex transaction with no certainty that it would close.”

The company’s workforce is split evenly between Rocket 4 development and Astra Spacecraft Engine production. Kemp said the company, as previously planned, has consolidated operations at its Alameda, California, headquarters. Some test equipment remains behind for now at a Sunnyvale, California, facility that had been dedicated to Astra Spacecraft Engine, but that facility will be closed by early next year once similar equipment is in operation in Alameda.

Astra already has some contracts for Rocket 4, including an $11.5 million contract from the DoD’s Space Test Program in April 2023. “The way I’m looking at this is, if we can bring Rocket 4 to the pad and fly it successfully, there will be more demand than we know what to do with,” Kemp argued, with customers already booked for the first 5 to 10 launches. “Let’s get to the pad, do at least one test flight and then we’ll go and start flying customers. And if those flights work, we’re going to get more orders.”

He said the company is targeted an average price of about $10 million for Rocket 4 for government customers and $5 million to $6 million for commercial customers. The difference is the additional paperwork and mission assurance activities needed for government missions.

Those plans, though, are predicated on the ability of Astra to not just develop Rocket 4 but fly it successfully. Kemp acknowledged that Astra fell short of that with its smaller Rocket 3, which suffered two failures in four operational launches in 2021 and 2022, including a final failure in June 2022 that led Astra to discontinue the vehicle. “Fifty percent wasn’t good enough,” he said. “What this contract does is make sure we have the resources not to take shortcuts.”

Kemp emphasized a focus on reliability for Rocket 4. “As I like to say, there’s two ways in this business to have things not work out: you can either have launch failures or you can fail to launch. Ninety-nine percent of companies fail to launch. Astra did not fall into that category. We did lots of launches, but too many of them didn’t work. We had too many launch failures,” he said.

“So now the question is, can we come back to the pad with something? Can we not fail to launch? We almost failed to launch. Can we not fail to launch and not have a launch failure is the needle to thread here.”