As It Heads Toward an IPO, Rocket Lab Takes Aim at SpaceX

Rocket Lab, a Long Beach manufacturer of small rockets used to launch satellites, plans to go public through a SPAC merger that will value the company at $4.1 billion.

The move could position Rocket Lab, which hopes to eventually send people into orbit, as a larger player in space travel.

The deal with Vector Acquisition, a special purpose acquisition company, is slated to close in the second quarter. Rocket Lab will be traded on the Nasdaq under the ticker symbol RKLB.

The merger is expected to generate $750 million in cash — including $320 million from Vector about $470 million of PIPE led by San Francisco-based Vector, BlackRock, Neuberger Berman and other investors.

"This milestone accelerates Rocket Lab's ability to unlock the full potential of space through our launch and spacecraft platforms and catalyzes our ambition to create a new multi-billion-dollar business vertical in space applications," founder and CEO Peter Beck said in a press release.

Since its first orbital launch in 2018, Rocket Lab has conducted 18 launches and delivered 97 rockets into orbit for customers including the National Reconnaissance Office and NASA. Beck told CNBC that the company founded in 2006 was "on a very methodical path to a traditional IPO" before pivoting to a SPAC merger.

On Monday, Rocket Lab also unveiled its new 8-ton payload rocket called Neutron that it hopes will eventually carry astronauts, putting the company in direct competition with Hawthorne-based SpaceX. While its first vehicle, Electron, holds up 300 kg (660 lbs), this second model is designed for larger commercial and government payloads. The two-stage launch vehicle will carry up to 8,000 kg to low Earth orbit and is expected to debut in 2024.

Beck told CNBC that the company aims to ensure the Neutron is "certifiable for human spaceflight."

The capability to carry astronauts could put Rocket in closer competition with SpaceX, whose Falcon 9 was certified for human spaceflight by NASA last year.

Rocket Lab currently operates two launch sites, in New Zealand and Virginia, and is looking to build a new factory to support "large-scale" Neutron manufacturing. That move will usher in hundreds of new jobs, according to the company.

Electron is the second most launched rocket in the U.S. annually and the fourth most launched globally, according to the company.

"Rocket Lab solved small launch with Electron," Beck said in a statement. "Now we're unlocking a new category with Neutron."

Vector's chief investment officer, Alex Slusky, will also join Rocket Lab's board along with Sven Strohband of Khosla Ventures, David Cowan of Bessemer Venture Partners, DCVC's Matt Ocko and independent director Mike Griffin.

"Rocket Lab is ideally positioned to continue to capture market share in the rapidly expanding space launch, systems and applications markets," Slusky said in a statement announcing the news.