Firefly Space Systems Suffers Funding Setback

firefly_space_systems_logoUpdate: I have heard everyone was laid off at Firefly. In addition, there are reports there was an arbitrator’s ruling earlier this month in the case brought by Virgin Galactic against its former head of propulsion, Tom Markusic, who co-founded Firefly. The ruling was that Markusic had taken proprietary information when he left Virgin Galactic. This is the type of ruling that dries up funding sources for startups, which would explain the company’s financial setback.

There’s been a statement posted by Firefly Space Systems via Twitter.

“Firefly Space Systems in recent weeks experienced a setback on funding, which us to take necessary action to maintain cash-flow equilibrium and position our company for future success. We are reviewing options with our financial partners and will be communicating updates to our employees in as close to real time as possible. We will update the media as soon as a resolution is reached.”

I had heard reports of layoffs in August of about 30 people, although a source said the number was less than that total.

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  • JamesG

    Well that sucks…

  • BJW

    Why didn’t you report the layoffs earlier?

  • savuporo

    Truly sorry, such a promising plan, team, good progress. Hope there is still room for a deal

  • John_The_Duke_Wayne

    Damn, I was hoping for a couple small sat launchers so we can have some good competition. Hopefully they can straighten something out and find a path to recover

  • JamesG

    The competition is for investor money because the (relatively) low barrier to entry and cost small-sat business is so crowded.

  • John_The_Duke_Wayne

    Yeah not the competition I was hoping for, the low barrier to entry is what was so promising about funding these ventures. I know it’s a stretch but I have to wonder if the recent failure has some investors concerned about low cost commercial launch providers

  • CC33040

    This was about investors pulling back based on how the litigation between Virgin & Markusic was disclosed (it was soft peddled) and it turned out to be a very significant hit on Firefly and was in fact spreading to Firefly. This will not end well for Firefly.

  • JamesG

    Its more that the high risk venture capital is drying up now that the Fed has stopped giving out the free candy, and the uncertainty about the US elections and global economics. Lots of money is going to ground until December.

    In the small-sat launcher biz, its that it seems everyone and their uncle wanting to throw their Radio Shack Special into space, so anyone with an engineering degree is putting out their shingle as a launch provider, even though most of them will never have more than a web site and powerpoint with some cool pictures on it. In that sense, nothing has changed in the space biz…

  • John_The_Duke_Wayne

    Well I’d give firefly a little more credit than powerpoints and pictures. Engines and tank test articles aren’t bad progress. But I get your point everyone is looking to get into the game and not everyone should be running their own biz

  • JamesG

    Yeah. Really is a shame because from his pedigree and some of the people he has working for him, they should have the best shot for jumping the valley of death… Oh well…

  • Sam Moore

    New tweet from firefly;
    ‘These guys want to get back to work! Owners and management are so honored to have such a dedicated and committed team #SaveFirefly’

  • windbourne

    who?

  • BJW

    Doug, the author, who else could I be referring to?

  • windbourne

    firefly, since they just announced it late on thrs. 3:26 and doug posted this on thrs at 4:22.

  • Douglas Messier

    heard about it got busy. When I had time to check a source told me they had build up fast and trimmed staff that wasn’t working out.

  • JamesG

    True. But a pile of rocket parts does not a viable business make.

  • John_The_Duke_Wayne

    Nope, you have to put them together and make them do something, then ya got sell it, for less than the other guy and still have some money left over. They have a long way to go but they accomplishes a lot in a short order.

    I can’t help but wonder if designing the aerospike has caused problems over just slapping engines on a tank to get customers flying

  • redyns

    Has anyone else noticed at USASpending.gov that Firefly had to give back $2.5M to NASA for the VCLS program on Sep 27 ? It says they changed from a ground launched system to an air-launched system ????

  • Douglas Messier

    Stratolaunch. Must be. Wondering if the uncertainty around Firefly was behind Stratolaunch’s delay in announcing a launch partner. And Chuck Beames’ sudden departure from Stratolaunch as Firefly was imploding.

  • Douglas Messier

    Is this giving back funding they received or does the $2.5 million represent further awards they will not be getting? VCLS is milestone based.

  • redyns

    NASA VCLS obligated $4.5M to firefly in 2015 for the award of the contract. This looks like a a reversal of some of that money since it is the same contract number. Rocketlab got $3.0M last year and apparently another $3.9M this year. I think they are obligations listed in USASpending.gov, but you are welcome to look (under advanced search)

  • Douglas Messier

    I believe the “deobligation” is what remained on the contract after milestone payments. You add the $2.5 million to the contract amount of $1.925 million and it comes out as $4.4 million listed under the original contract.

    Thanks for pointing this out! Appreciate it.