Starburst Ventures Launches Early-Stage Investment Fund for Space Startups
Starburst Ventures, the venture capital arm of space accelerator operator Starburst Aerospace, opened a new fund today to invest in startups looking to conquer the final frontier.
Founded in 2012, Starburst Aerospace operates accelerator programs for companies in the Los Angeles aerospace and defense industries as well as six other cities worldwide, including Tel Aviv, Seoul and Paris. The programs connect startups with industry experts and potential investors, with the goal of helping each company secure contracts.
Often Starburst will cut checks to fund accelerator participants it finds promising; though this is its first formal early-stage venture fund, Starburst has been steadily investing in startups for years. Its network of partners is extensive and includes NASA, the U.S. Space Force, and nearly every major government contractor—including Raytheon, Lockheed Martin and Northrop Grumman.
Starburst’s Los Angeles outfit previously partnered with TechStars beginning in 2019 to incubate space companies, but Starburst launched its first fund dedicated to direct investing on Sept. 21. In combination with TechStars, Starburst’s previous accelerator worked with 20 companies, but the outfit said that it has helped develop 120 companies since 2015.
Starburst Ventures wouldn’t disclose the fund’s total value, but Benjamin Zeitoun, director of Starburst’s LA and Paris accelerator programs and an investor at Starburst Ventures told dot.LA, “currently, our plan is to invest up to $1 million, up to Series A, with a sweet spot in the middle.”
The new fund will back early-stage startups focused on both hardware and software for the aerospace, defense, aviation and security industries. Starburst Aerospace founder and CEO François Chopard will lead the venture outfit as general partner.
“We're looking at the entire value chain of Aviation, Space and Defense, as well as some deeptech subjects that can have a big impact on our industry,” Zeitoun said. “We're seeing [second] and sometimes [third] generation new space, aviation [and] defense companies where founders and talents have had experience innovating in the industry. They are also bringing lessons learned and a deep understanding of a problem they want to solve. The LA area (& SoCal) is a very large pool of that talent.”
One local startup that’s already benefited from this new fund is Outpost, a reusable satellite company that in August raised a $7.1 million seed round led by Moonshots Capital – Starburst invested in that round.
Another recent investment from the new fund was Starburst’s backing of Australian machine learning company Strong Compute, which raised a $7.8 million seed round in May.
Fund advisors include Jacqueline Tame, a longtime space and defense policy advisor and former joint director of the Department of Defense’s AI Center, and Bloom Energy head of strategy Natalya Bailey. Both Tame and Bailey will also act as mentors to Starburst’s startups.
“We're fortunate to count on Ms. Tame and Ms. Bailey not on a distant "’board capacity,’ but as very hands on advisors that help us source great founders, conduct due diligence, and support the companies we've invested in,” Zeitoun said.
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