Varda Space Industries has reached a major milestone, securing a massive amount of funding shortly after the triumphant return of its first drug manufacturing capsule from orbit. This $90 million Series B round is a pivotal moment for the company, as it prepares to move past its demonstration phase and towards frequent flights with customer payloads. Varda’s founder, Delian Asparouhov, spoke with TechCrunch about the company’s future plans.
Founded in 2021 by Asparouhov, also a partner at Founders Fund, and spacecraft engineer Will Bruey, who gained experience at SpaceX, El Segundo-based Varda embarked on a bold mission to commercialize the previously small-scale research into the impact of microgravity on pharmaceutical crystals.
While Varda’s first mission, which returned to Earth after 10 months in orbit, is not the first instance of drug crystallization in space, it does represent a significant turning point for the industry. Astronauts have been conducting protein crystallization experiments in space for decades on the International Space Station and before that, the Space Shuttle.
However, there were a few barriers preventing this research from expanding on a larger scale until now, Asparhouv explained. Firstly, due to the limited crew on the ISS, there were strict limitations on the solvents and materials that could be brought onboard. Additionally, there were intellectual property constraints for research conducted on the station, and space-based pharmaceutical lab equipment was not as advanced as its terrestrial counterparts.
But a lot has changed in the space industry, making Varda’s mission possible. Thanks to the availability of regular and affordable rideshare launches from companies like SpaceX and Rocket Lab’s innovations in satellite bus manufacturing, Varda has made significant progress. The success of their first mission, with a flawless reentry capsule and a seamless execution of the Ritonavir drug reformulation experiment, is a testament to that progress.
“Over time, we will be able to generate datasets between both hyper-gravity and microgravity and start to show correlations.”
As Varda continues to expand its flights, they hope to develop a deeper understanding of how different gravity levels affect drug performance. As Asparhouv puts it, “we will start to be able to develop systems of thinking where, for patterns of particular types of chemical systems, hyper-gravity will be used as a way to determine the correlation between, ultimately, microgravity and the drug performance.”
Despite the early success of Varda’s first spacecraft, appropriately named Winnebago, the company still has a lot of work ahead. While engineers analyze the vehicle’s performance, Varda will focus on increasing the cadence of their flights before pursuing reusability.
But the ultimate goal is to significantly reduce mission costs by refurbishing and reusing the Winnebago capsules, similar to SpaceX’s Dragon capsule. However, this may not be feasible until later in the decade, around 2027. Asparhouv recently stated in a podcast that the initial cost for a mission was $12 million, but by the fourth mission, it will drop to $5-6 million, and by the tenth mission, it will be $2.5 million or less. Varda also has plans to develop larger capsules, but those will not be ready until around 2027.
Asparhouv confirmed that Varda’s main focus for the next 10-20 years will be pharmaceuticals, as they believe this industry will generate the most economic value. This is due to the fact that some drugs only require a small “seed” crystal that can only be produced in microgravity, while the rest of the drug formulation can be completed on Earth. This results in a high-revenue, low-mass product.
The company also plans to improve the on-board pharmaceutical reactor’s processing capabilities. While their first mission only carried one drug protein, Varda hopes to process multiple products in the future. This would involve using different processing methods and potentially using larger reactors for drugs that need more than a “seed” crystal. These types of missions would resemble mass manufacturing.
Varda already has contracts signed with several publicly traded biotech companies, and their next three missions are manifested with Rocket Lab, who provided the spacecraft bus for their first mission. The company’s next manufacturing mission is scheduled to launch later this year, with plans to land in Australia.
The $90 million Series B round was led by Caffeinated Capital, with participation from Lux Capital, General Catalyst, Founders Fund, and Khosla Ventures. In total, Varda has raised $145 million to date.
