The billionaire space race dominated by the Bezos-Musk-Branson trio now has a new participant: Europe’s Porsche family. Porsche SE, the holding company that controls Volkswagen, on Wednesday announced an investment in German rocket maker Isar Aerospace, a startup vying to challenge SpaceX, Blue Origin and Virgin Group’s Virgin Orbit in the booming business of low-cost satellite launch service.
Porsche SE is joined by the venture capital company HV Capital and Swiss bank Lombard Odier to invest $75 million a funding round that values Isar at $550 million. In exchange, Porsche SE would receive a “a low single-digit percentage stake” in the company.
Although a half-a-billion-dollar valuation pales in comparison with the scale of SpaceX and Blue Origin—SpaceX was most recently valued at $76 billion; Blue Origin receives $1 billion in fresh capital every year from Bezos—it’s a sizable amount for a company barely three years old with zero track record.
Since its inception in 2018, Isar has raised a total of $180 million in venture capital funding from investors including Airbus’s VC arm and Bülent Altan, a former satellite mission executive at SpaceX.
Isar plans to launch its first test flight next year with a launch vehicle called “Spectrum.” In May, the company was awarded a contract by Germany’s space agency to launch two government satellites into low Earth orbit.
The Porsche funding “will allow Isar Aerospace to further invest in its launch, testing, and manufacturing infrastructure for its largely automated rocket production and commercial operations,” the company said in a statement on Wednesday.
Unlike SpaceX and the smaller Rocket Lab that specialize in reusable boosters, Isar’s core strategy to reduce launch cost is to automate the rocket production process.
“We are convinced that cost-effective and flexible access to space will be a key enabler for innovations in traditional industries as well as for new and disruptive technologies and business models,” Lutz Meschke, deputy chairman of Porsche SE, said in a statement.
Porsche SE is controlled by the related Porsche and Piëch families. Porsche’s founder, Ferdinand Porsche, is the designer of the original VW Beetle. His grandson, Ferdinand Piëch, became the chairman of Volkswagen in 1993.