Spring Break on Mars, Summer Out on Saturn

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Happy Monday, folks.

Keeping it simple: do I talk too much?

You wouldn’t be the first to tell me that I’m a rambler. Promise I won’t get offended. My skin is thicker than a rhino’s. Unless you tell me that I’m not funny… my entire sense of self is wrapped up in that one.

Seriously, though, the goal is always to tailor this to be as entertaining and valuable for you guys as possible. Would you prefer more bullets? Fewer run-on sentences? Not so many references to whichever show I chose to watch over being productive yesterday?

As always, shoot me a quick reply and lemme know 🥰 

If you think your Thanksgiving road trip to Grandma’s is long, try making the journey to Mars. Apple Maps says the 300 million mile trip takes 7 months, 8 when avoiding tolls, on today’s most advanced rockets. Boring? Yes, but doable as long as there are a couple Buc-ee’s stops along the way.

Pretty soon, that could be cut to 30 days, and in fact, Mars might end up being the x-way point on the way to even more distant planets like Saturn. Such is the goal of Pulsar Fusion.

The company is building the future of rocket engines, literally looking to the stars for inspiration for its nuclear fusion propulsion systems. Their Direct Fusion Drive compact fusion engine utilizes the same process that occurs naturally on the sun, the one helping everyone else to achieve that bronze glow while you just burn like Larry Lobster.

For many, mentions of “nuclear” inspire Oppenheimer-chic images. For me, atom manipulation get my heart gets all jittery like when Hanna liked my Instagram pic in 7th grade. I’m a radiation nerd.

While this renewable energy source does come with a carry-on full of controversy, it does offer immense promise. Even today, despite some brief setbacks that did make for awesome shows, nuclear produces about 10% of the world’s energy supply.

Many believe that fusion is the future of nuclear, though it’s considered to be a decade plus away (though we tend to say that with a lot of technologies 👀) Pulsar is shooting its shot, betting on the technology to be available much sooner to enable its in-space propulsion system.

The company’s DFDs will power thrust and impulse on spaceships, and their compactness and light weight mean they can be used on ships of any size. They’re highly efficient, and even better, they’re far more eco friendly than existing engines. Maybe we won’t bring down Mars with global warming, too?

The company has made significant traction in its development process. A brief timeline:

• 2021: completed a State of the Art (SoA) assessment on heating technology

• 2022: awarded funding from the U.K. Space Agency to develop nuclear-fission based propulsion system

• Today: constructing initial prototype static fusion rocket engine

Plus, the experience of the company’s leaders makes creating a detailed and realistic roadmap possible. Some highlights:

• 2024: beginning static tests

• 2027: achieving fusion temperatures and In Orbit Demonstration (IOD)

To date, the company has raised $13.3 million through its recent Series A with investments from Octopus Ventures, 83North, and The Family as well as through various grants from the UK Space Agency and Defence and Security Accelerator (DASA). You can tell it’s British because they spelled Defence pretentiously.

With an estimated valuation north of $26 million and a dedicated team of 30 engineers and scientists, the company has the name recognition that has allowed it to develop vital partnerships to aid its progress such as with aerospace R&D company Princeton Satellite Systems which will use its AI to model the behavior of hot plasma in a fusion rocket engine. Could’ve partnered with Character.ai and had Einstein talk them through it smh

They say that Space is infinite, and it really seems like the market for anything space-adjacent is, too. The global space propulsion market is projected to grow from $8.3 billion to $22.5 billion by 2026, a CAGR of 22.1%.

Breaking the propulsion system market down further, the chemical segment is the largest, accounting for over 70% of the market share due to its widespread accessibility for use in launch vehicles and spacecrafts already.

Electric is the fastest growing segment, largely because it’s still much more imminent than the nuclear systems of companies like Pulsar.

Where does this demand come from?

• growing interest in space exploration from space agencies and Elon/Jeff/Richard

• increasing number of commercial space ventures (sats, near-Earth economy, etc)

• development of new propulsion technologies (like electric and nuclear propulsion) which offer significant advantages over existing systems

While many look at Pulsar like they’re crazy, at least they’re not alone?

• Accion: developing nuclear system for launch vehicles with over $65 million in funding (targeting an In Orbit Demonstration in 2025, 2 years before Pulsar); also acquired rival Apollo Fusion

• Bellatrix Aerospace: building nuclear system with $11 million in funding and IOD target of 2027

• Momentus Space: making plasma-based system with over $100 million in funding and IOD target set for this year

• Relativistic Space: creating laser-based system with $50 million in funding and IOD target of 2024

In addition to these well-funded companies, Pulsar will also face competition from the nerds over in academia, namely MIT, Berkeley, Princeton, and Lawrence Livermore 🤓 

As crazy as it sounds, I don’t view the feasibility of the technology itself as the biggest obstacle so much as accessing funding in the face of many, many hurdles, and jumping through regulatory hoops can trip up even the savviest of teams.

The company has deep expertise in propulsion:

• Richard Dinan, CEO and co-founder: serial aerospace entrepreneur; co-founder of Made in Chelsea reality show

• Dr. James Lambert, CTO and co-founder: nuclear physicist with 20+ years in fusion research

• Zaheer Ali, COO: space industry veteran with 15 years of experience

• Dr. Andrew Shepherd, CSO: 10 years in plasma physics, specifically fusion research

Plus, when they need some outside opinions, their team of advisors is extraordinary:

• Dr. Paul Townsend, Professor of Fusion Energy at the University of Oxford

• Dr. Paul Bellan, Professor of Plasma Physics at the University of California, San Diego

• Dr. John Simpson, former CEO of Reaction Engines

These guys are pretty much eligible for intergalactic citizenship at this point. They’re prepared to make Space as familiar to everyone else as it is to them.

While promising, the company is certainly not without risk. Building something this complex is insanely tough. I’ve experienced it first-hand through my experience constructing paper airplanes in 6th grade science.

Even after building the thing, the company will have to demonstrate its safety and reliability, and rightfully so, this is not an easy process. Aerospace innovation is a highly regulated industry, and a technology with this much potential is going to attract all sorts of competition.

I expect the industry to attract further attention as progress becomes more evident. We’re still a long way off from weekend trips to Europa, but it’s startups like Pulsar that make me giggle uncontrollably about how freaking awesome tech can be.

In the meantime, can’t do anything about those long roadtrips. But I can at least recommend the Beaver Nuggets and clean bathrooms?

Pulsar Fusion is developing nuclear fusion propulsion systems to revolutionize space travel. Their technology aims to drastically reduce space travel time. With fresh funding, a skilled team, and a growing market, they're well-positioned for success despite the inherent challenges of their ambitious endeavor.

Funding Round Up

Apologies ahead of time for those of you who are statistically challenged. Got a whole lotta data in this one, so going rapid fire.

For the solar sisters:

• Climate tech deal count and value slipped 40% H1

• The downturn was worse in Series B and later

• Also concentrated in certain industries like food tech and EVs (but at least Elon finally shipped his first Lego truck?)

• Carbon removal/accounting funding actually rose to $4.1 billion

For the farmer Joes:

• Agtech funding fell to $1.9 billion on 172 deals in Q1, -10% & -39% QoQ respectively

• Interestingly, while the downturn burn has been felt in later stage companies in most industries, later stage deals were investors’ choice here

• Median valuations were up 20% to $16.5 million

• Indoor farming companies were the ugly step child, getting no love from investors and seeing multiple companies convert to Spencer’s and Great American Cookie Company

For the hacker homies:

• Cybersecurity funding for Q2 was down 63% YoY

• The $1.6 billion raised was the lowest quarterly mark since Q4 2019

• Two consecutive quarters to forget brought H1 numbers down 60% to $4.3 billion, well shy of H2 2022’s $6.4 billion

• Q2 deal count of 148 was down 35% YoY, and the half’s 312 sum was a 38% drop

• Only 11 rounds were worth more than $100 million, down 66% from last H1’s 33. Q2 only had 5

• There’s a significant divide between public and private companies with listed companies seeing really strong performances which could lead to Energizer bunny-like M&A activity

For the finance friends:

• Fintech venture action was down almost 50% for H1, hitting $23 billion

• We’re sorta seeing a rebound from last year’s H2 collapse tho

  • $8 billion Q4 last year

  • $9 billion in Q1 2023

  • $14B in Q2 2023

• Important caveat that this “bounce back” was carried like Matthew Lillard in Scooby Doo by 3 Stripe

• A true rebound will require some serious growth in deal volume

For the insurance… inquisitive?:

• Insurtech funding was down 50% in H1

• Frankly, there’s not a ton of optimism for this sector to get the bounce seen elsewhere

• Some investors have literally been quoted as questioning whether there is any future in the industry

• Yikes lol

Q2, H1 Report Card: The Bad, the Bad and the Bad

If there has been any sign of hope in the venture world over the last year, it has been that despite the broader market downturn, pre-seed and seed deals really weren’t seeing a ton of pressure. Investors tend to view the 5-10 year horizon in which these companies would be expected to grow as pretty hopeful.

No more. The world is ending. Not even the children are going to be spared.

This past quarter saw 766 seed deals, down 26% from Q1’s 1044 and hitting the lowest levels since Q3 of 2016. We’re on pace for the slowest year since 2017. That’s like when Macklemore was cool. What’s that? He was never cool? So I should go ahead and delete The Heist because nobody is going to approve of me playing it when I’m on aux?

Some investors are blaming unusually long deal timelines putting pressure on the number of deals which can be accomplished. Others are pointing to the fact that exits are still down badder than Kay Adams for Shams. So far, just $12 billion has been realized in exit value this year, and worse, Q2 marked a decade low.

Yeah, nothing to lighten the mood here. Maybe watch some Parks and Rec or something?

Unicorn Market Feeling Like He-Who-Must-Not-be-Named

In Harry Potter, unicorns’ worst nightmare is a certain no-nosed dark sorcerer. In 2023, a unicorn’s worst nightmare is a 30-something with some Allbirds and a kombucha obsession telling them the unfortunate news that they’re lowering their valuation below the mystical $1 billion mark.

Formation of new unicorns is at a multiyear low, though soaring tech stocks are pulling a few select startups with them. We’re seeing a 13.3% increase in new billi babies, led by Asia’s 16.3% increase. The US (12.5%) and Europe (8.2%) are lagging by modest amounts.

We’re long removed from the abnormal 2021 market. However, maybe Cava was onto something?

The company went public a few months ago and has been caught in the upwards momentum of the rest of the market, making its decision look pretty darn savvy.

If you had to bet on one of Stripe, Instacart, and Reddit announcing its IPO, who is your money on, and why is it Fogo de Chão?

GPT… LLMs… AI… ML… TGIF…

All of these AI acronyms and terms got you asking WTF?

Stay in the know on all things hallucinations and free cover letter writers and check out WhatAi Newsletter, your free source of daily AI coverage 👇️ 

Cheers to another day,

Trey