Rocket Lab founder and CEO Peter Beck joins Yahoo Finance Live to discuss the company's Neutron launch, exploring Venus, and the total addressable space market.
AKIKO FUJITA: Well, small launch leader Rocket Lab is set to begin construction on its engine test facility for its reusable neutron rocket. That will take place at the Stennis Space Center in Mississippi. Local officials are hoping the facility will bolster the US's aerospace competitiveness.
Here in studio, we've got Rocket Lab founder and CEO, Peter Beck. Peter, great to talk to you on the back of what was a very eventful investor day. Let's start with that 10-year lease at the NASA test site in Mississippi. Obviously, there was already a big footprint there for this space. But what does this particular location mean in terms of your ability to build on Rocket Lab's ambitions?
PETER BECK: Yeah, so we're developing Neutron, which is a medium to larger launch vehicle. And in order to test engines quickly and efficiently, you need very large infrastructure. So we are super fortunate to be able to leverage government-- a previous government asset. And it would take you half a decade to build that infrastructure there. So our ability to kind of come in there and take over that infrastructure really accelerates our program and accelerates the timeline for us to be able to deliver Neutron to the market. So, for us, it's a really significant piece of asset and time reduction.
AKIKO FUJITA: Yeah, Neutron obviously that next step in terms of where the company is headed. What does the timeline look like for launch on that right now?
PETER BECK: Yeah, we're trying to get something on the pad by 2024, which is a pretty aggressive timeline. But, you know, given that it's a similar kind of time frame that we developed Electron, the rocket that we launch now, and we're leveraging a lot of the things that are on our current launch vehicle that port basically directly across to Neutron. So the avionics and software don't care what size the rocket is. So there's a whole bunch of stuff we move directly across. And, you know, this isn't our first rodeo. We've done this before. So that gives us confidence we can meet those timelines.
AKIKO FUJITA: In the meantime, your core business obviously looking at the Electron launch here. You've obviously now looked at Virginia as sort of the key spot, but you've now gone through, what, is it 30--
PETER BECK: 30 launches, yeah.
AKIKO FUJITA: 30 successful launches. In terms of small satellites, how big is that market, and how quickly is expanding for you right now?
PETER BECK: So the total launch market is around about a $20 billion TAM. And small launch is obviously a segment of that. But by having the electron launch vehicle, which is, as you mentioned, leading the market on small launch, when we bring on Neutron, it really gives us about 85% of the addressable market we can actually address with those two launch vehicles.
AKIKO FUJITA: And so you mentioned that the TAM, specifically this whole addressable market, expanding significantly over the next few years. Does that incorporate those two pieces that you just mentioned?
PETER BECK: Yeah, so I think it's important. Most people think of Rocket Lab as a launch company. And it's probably something to do with the name, but the reality is that 2/3 of our revenue actually come from our Space Systems Division. So while launch is a very important element of the company, and it is the enabler, and we've got a very active rocket program, actually, the Space System's part of it. Our business is bigger than our rocket business.
So what we're trying to build here is actually an end-to-end space company, where customers come to us and we build their satellites, we launch their satellites, and sometimes we even manage their satellites on orbit for them.
AKIKO FUJITA: You are a publicly traded company. You came through market through a SPAC. We have seen a significant downturn in the equity space overall, but especially in some of these high growth spaces that aren't necessarily profitable. How are you trying to balance the ambitions that will ultimately mean just more costs, more investment, at a time when investors are saying, when are we going to get to that point where it's profitable?
PETER BECK: Yeah, so I think the big difference between Rocket Lab and many others in this place is that we have a product and we have a real business. We're generating cash, and we have a clear path to profitability. You know, Neutron is the only thing that's really consuming cash within the business at this point in time. You know, Electron, as you mentioned, we've launched it 30 times. And our Space Systems business is doing very well as well.
So I think that's a big difference between us and others is that we actually have a real business. And we use that SPAC process and the proceeds. We overfunded ourselves. We funded ourselves to the tune of 770 million. And we spent about 180 million on acquisitions, building a lot of robustness into the company. And we have a very, very healthy balance sheet. So we have no liquidity issues, and we're fully funded. So I guess that's the major difference between probably us and a lot of others in the space that came to market with a dream. We came to market with a product and a real business.
AKIKO FUJITA: I do have to ask you about the dream, though, because maybe not the focus of shareholders, but the probe called the Venus Life Finder. This is the first private mission to Venus. May 2023 is what we've heard before. Are you on track for that timeline? And what specifically does Venus offer? For those who are saying, well, what is there to explore there?
PETER BECK: Yeah, so I mean, this is very much a philanthropic mission. We have a lot of partners involved in this mission from MIT, the science team. And basically, the whole point of this is that with the discovery of phosphine in the atmosphere of Venus, that is a bio life sign marker. And we recently went to the moon with our Lunar Photon mission, [? Vanessa. ?] And that really built the spacecraft that is enabled to go to Venus.
So we have the hardware. We have the capability to go to Venus. And if you have the opportunity to determine is there life outside Earth or not, that's a pretty big opportunity and pretty big thing to do. So we're doing it in nights and weekends. And we'll see if we get in 2023. It's not the priority of the company. But certainly, if we could even help try and prove that there is life outside Earth, I think that would be a pretty monumental discovery if we could make it happen.
AKIKO FUJITA: Yeah, you said it's a passion project, but certainly a lot of people interested. It is fascinating to see the exploration part of all this. Peter, it's good to have you in studio.
PETER BECK: It's great to be here. Thank you.