China rocket developer Orienspace raises $60m

Other investors include CMBC International, Chinese video game developer miHoYo, Sky Saga Capital, Vision Plus Capital, Atlas Capital, Oriza Seed, and FanZhuo Capital.

Orienspace is the second start-up of serial entrepreneur Song Yao. In 2015, as a fresh graduate in electrical engineering from Tsinghua University, Yao launched artificial intelligence (AI) chip developer DeePhi Technology on campus in conjunction with one of his professors. Three years later, the business was acquired by US-listed Xilinx at a valuation of USD 300m.

In 2021, Yao launched See Fund and returned to China’s academic institutions to look for the next generation of hard technology unicorns.

See Fund closed its debut vehicle at CNY 200m later that year. Sequoia Capital China, Hillhouse Capital, Matrix Partners China, CPE, ZhenFund, FreesFund, Ant Group, Zhongguancun Science City Science & Technology Fund, ByteDance, and Tsinghua Holdings all made commitments.

Orienspace was founded in 2020, with Yao filling roles as co-founder and co-CEO after he left Xilinx. Orienspace’s plan is to develop both solid and liquid fuel launchers with an effective iteration and systematic innovation.

The proceeds will support a first rocket launch and development of a reusable liquid fuel engine. A test flight is planned for mid-2023. The first launch vehicle, called Gravity-1, is hoped to be able to lift around 6,500 kilograms of payload into low Earth orbit, or 4,200 kilograms to 500-kilometer sun-synchronous orbit. This would make it the largest-capacity launcher in China’s commercial space sector.

China’s space tech sector ran hot in 2019 and 2020 before leveling off in recent months and being reinvigorated with new government initiatives around satellite networking. Commercial rocket maker Galactic Energy, for example, raised USD 200m across two funding rounds during the second half of 2021, the company announced in January.

Commercial rocket developers have absorbed most of the private equity capital. Landspace, i-Space, and OneSpace are considered the local market leaders, each with its own strategy. Landspace focuses on mid-size liquid fuel launchers, while OneSpace concentrates on solid fuels. I-Space has competency in both areas, across small and large payloads.

I-Space became the first private Chinese launch company to reach orbit in 2019 but suffered its third consecutive failure with its Hyperbola-1 solid rocket. Galactic Energy is the second commercial developer to achieve orbit, with a light-lift solid rocket.

In September 2020, LandSpace raised CNY 1.2bn in a Series C extension led by Sequoia China, the VC arm of property developer Country Garden, Matrix China, and Co-Stone Capital. This came on the heels of a Series B – also worth CNY 1.2 bn – for I-Space.

Several satellite specialists have received VC funding. They include Galaxy Space, which is backed by the likes of Shunwei Capital, 5Y Ventures, and IDG Capital, and Comm Satellite.

Chang Guang Satellite Technology raised CNY 2.46 bn in pre-IPO funding in 2020 from the likes of CICC Capital and Haitong Innovation. It was the largest-ever funding round in China’s commercial aerospace industry.

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