An El Segundo space company that makes pharmaceuticals in orbit just closed a massive new funding round, with Varda Space Industries landing fresh capital at a $1.6 billion valuation. The company says the money will accelerate its fleet of autonomous spacecraft that launch into orbit, crystallize drug ingredients in microgravity, and then plunge back to Earth at hypersonic speeds to deliver the goods.
According to Reuters, Varda raised $250 million in the Series D round at a $1.6 billion valuation. Varda itself, in a release carried by PR Newswire, put the figure at $251 million, led by Lux Capital and Natural Capital. The discrepancy between the two figures remains unresolved, but both accounts agree the round pushed Varda's total capital raised to $598 million. Founders Fund, Khosla Ventures, Caffeinated Capital, General Catalyst, 8090 Industries, Giant Step and Also Capital also participated, per the same PR Newswire release.
Varda was co-founded in 2021 by CEO Will Bruey, a former SpaceX engineer, and Delian Asparouhov, a partner at Founders Fund, the Los Angeles Business Journal reports. Asparouhov said the new funding will help Varda increase its launch cadence, deepen pharmaceutical partnerships and get closer to delivering the first medicine made in space, according to the Business Journal's reporting. The company builds small laboratories that launch into orbit carrying pharmaceutical components as payloads, and those laboratories rely on microgravity to crystallize active pharmaceutical ingredients in ways that would be impossible on Earth, per the same PR Newswire account.
How the W-Series Capsules Work
Varda's spacecraft are called W-Series vehicles, which the company describes as the first commercial satellite and reentry vehicle built specifically to return materials from orbit, according to Varda's own platform page. Those capsules reach Mach 25 on reentry, the PR Newswire release states. Varda has completed six successful reentry missions since its first launch in 2023, and the company has more than a dozen additional launches and reentries planned through 2028, per the same release.
Reuters offers a somewhat different count, reporting that Varda has 28 launches booked with different providers through 2027 to 2029. The scope of those two figures is not fully reconcilable in available reporting. Reuters also reports that Varda is planning to launch two capsules simultaneously for the first time aboard a SpaceX Falcon 9 rideshare mission.
Government Work Still Dominates the Customer Base
About 70% of Varda's payload customer base for the coming year is government-based, with the remainder in commercial pharmaceutical work, Reuters reports. The outlet adds that Varda expects that mix to gradually flip toward commercial pharmaceutical work by 2032. The company also plans to debut a next-generation capsule in 2030, according to the same Reuters report.
Varda added Pfizer veteran and biotechnology executive Mikael Dolsten to its board in August, according to Yahoo Finance. Reuters reports that roughly 18% of Varda's approximately 275 employees have pharmaceutical backgrounds, underscoring the company's push to position itself as a pharmaceutical company that happens to operate in orbit rather than purely an aerospace outfit.
A Crowded Field Racing Toward Space-Made Medicine
Varda faces competition from SpaceX's Starfall program, which debuted this year, as well as startup Inversion Space, Reuters reports. Redwire, another rival, plans to send as many as 32 mini space laboratories into orbit aboard SpaceX's Starfall in 2028, according to Fierce Pharma. Elsewhere in the field, SpaceMD has already flown 54 PIL-BOX units and tested 37 drug compounds, according to CNBC, which also reports that Varda is planning to nearly double its flight cadence to seven flights next year.
The idea of growing pharmaceutical crystals off-planet is not new. Merck conducted crystal-growth experiments aboard the International Space Station back in 2014 involving medicines including its cancer drug Keytruda, per CNBC's reporting. The business of manufacturing things in space has grown as the station's planned 2030 retirement approaches, Reuters notes, pushing companies like Varda to build their own independent infrastructure rather than relying on the aging orbital outpost.
Morgan Stanley predicts the broader space economy could surpass $1 trillion by 2040, CNBC reports, a forecast that helps explain the surge of investment into ventures like Varda. Still, the industry has real limits to prove out: as of late 2024, recurrently manufacturing specific pharmaceuticals with intent to sell directly to retail consumers had not been performed, according to Factories in Space. Whether commercial access to low-Earth orbit eventually makes drug discovery and manufacturing in space practical, affordable and commonplace remains an open question explored by C&EN — one that El Segundo's Varda is now betting hundreds of millions of dollars on answering.
