Varda raises $250 million at $1.6 billion valuation to scale orbital drug manufacturing

Washington, September 30 - In-space manufacturing company Varda Space has secured $250 million in a Series D funding round, valuing the firm at $1.6 billion, according to Reuters. The company is preparing to expand its missions to produce pharmaceuticals in microgravity. Varda, based in El Segundo, California, is among a select group of US firms developing unmanned space capsules that can serve as orbital laboratories or manufacturing platforms for products with superior efficiency or purity when developed in space compared to Earth's gravity.

The latest funding round, led by Lux Capital and Natural Capital, brings Varda's total raised capital to $598 million since its inception in 2021. CEO and former SpaceX engineer Will Bruey and Founders Fund partner Delian Asparouhov spearheaded the company's formation. Since 2023, Varda has launched six missions to orbit using its compact, free-flying W-Series capsule, with all missions except the fourth successfully returning to Earth.

The company intends to debut a next-generation capsule in 2030. On Thursday, Varda plans to launch two capsules simultaneously via a rideshare mission on SpaceX's Falcon 9 rocket, carrying hypersonic research payloads for the Pentagon and commercial customers. Despite SpaceX's phasing out of Falcon rockets and winding down rideshare missions, Varda remains unaffected, as it has 28 launches with various providers scheduled through 2027 to 2029.

Varda's primary focus has been on the pharmaceutical industry, with about 70% of its clients for next year being government entities and the remaining commercial pharmaceutical work. The company anticipates this balance to shift by 2032, reflecting its confidence in pharmaceuticals. In August, Varda added biotechnology executive and former Pfizer executive Mikael Dolsten to its board.

Approximately 18% of Varda's workforce of 275 employees have pharmaceutical backgrounds, as per Asparouhov. As the International Space Station nears its 2030 retirement, the manufacturing business in space has gained momentum. Varda competes with SpaceX's Starfall program and startup Inversion Space, which operates in the point-to-point transportation market.

The Pentagon sees orbital space as a fast highway for military cargo delivery worldwide in roughly an hour.