K2 Space raises $500M and crosses $1B in signed contracts after successfully flying its first giant satellite

Speaker 1: And our next guest is in the waiting room already. We have Karen Punjer from k two space with an amazing update. How are doing? Here he is. Good to see you again. He's back. You're back. Welcome back. Give us the news. The gong's warmed up. I wanna hit it again. Yeah. So we just announced a 500,000,000 round. Congratulations.

Speaker 2: So for anyone living under a a data center here on Earth, what's going on in space? What's the latest on the space economy? Anything happening? Any big

Speaker 5: any big deals? Not that much. It's been a it's been a quiet year. You know, a lot of, like, seed stage investments. Nothing much going on in space this year. But no, I yeah, we started K2, we want to build giant satellites. Since the last time we talked in December, we flew our first giant satellite. We called the mission Dramatost, if you guys remember, and it's gone well. We're one hundred and twenty days in. We proved that we could do a lot of really hard things, and, yeah, this round comes on the back of that. What was the very first satellite that you

Speaker 1: thought about putting up in in terms of actual use case? Like, if I go back to the very first deck or memo you put together, obviously, there was a vision for building satellites, putting them in space, but were you thinking cameras or Internet or data centers? Or, like, what was the earliest prediction?

Speaker 5: So when we started the company in June 2022, our pitch deck was all about Starship, and it was all about, like, building physically what's the largest possible satellite you could build using Starship. Yeah. And it was I mean, we thinking about data centers, we were thinking about orbital fuel stations, we were thinking about giant telescopes, like Okay.

Speaker 1: And our pitch deck, to show you, like, how wrong we were, we were like, oh, yeah. In 2024, we'll be using, you know, Starship on, a monthly basis. Yeah. A little bit wrong on timing there, but Yeah. It's alright. And and and those delays, I mean, there there have been delays. Everything I mean, the video of Starship landing that dropped, like, a week ago is incredible. Everyone's like, you know, I can't believe this is in CGI. Are are you are you set up do do you set up your business to be insulated from those delays? Is the overall, like, space economy broad broad enough and diverse enough that at this point, slight delays, everyone sort of adjusts, all the different actors from employees to investors? No one really freaks out when there's, like, a slight delay there because everyone prices it in?

Speaker 5: Yeah, we got fortunate. We had a few very smart people tell us in 2022, maybe don't go full send on Starship. Okay. Yeah. And that's the whole thing, thankfully. And so we something that's compatible with Falcon nine. Our our entire business, like, we announced, that we also crossed a billion dollars in signed contracts. All those contracts are tied to Falcon nine. Right?

Speaker 1: That's a big number. So I have heard I think we've all heard the pitch of lots of small satellites, potentially data centers network together. We've all seen the how well Starlink works. It's an incredible technology, and it and it's an incredible technology because it works with Falcon nine. It also works with Starship. Is there an actual use case or a world where you see basically the Starship fairing filled with just a single satellite, some huge thing that goes up, stays there, and it's massive and there's benefits of the scale to that degree.

Speaker 5: Yeah. I think, for us, least, we're going to use it for proliferation like lots of big satellites. Yeah. I think there's probably some military use cases that might get interesting where you go even bigger and Yeah. Maybe fewer per per Starship. But for the most part, we're gonna stick to, like, okay, let's put up, like, 50 of these in a Starship and Yeah. Think about how to max out how much power per satellite and power per launch vehicle. Sure. Maybe on the telescope side, like, as you start to get, like, giant giant telescopes Yeah. Things. But even those with the Hubble, like, you can usually, like, assemble things in space, which sounds Yeah. Even more complicated than than anything else, but but it has been done before. Like, the ISS didn't go up in one big piece. It was assembled over time,

Speaker 1: which is remarkable to think about, but congratulations. Walk us through the energy density or energy power output that comes from these satellites because there's this big vision that Elon's been very good about laying out. The timeline, you know, who knows, might slip or whatever, but there's this idea of, like, gigawatts in space that would be meaningful to the AI inference market. But there's clearly going to be a walk, crawl, run. Starlink has a certain amount of power. We've seen that that can work. But what is the scale up and build out of just getting more energy in space before you start running into crazy heating and what the solar capacity can be? Yeah. Power drives everything in space, right? If you think about communications,

Speaker 5: power drives how much throughput you can put down on the ground. It drives the strength of the signal. If you think about compute, power drives how much compute you can host. It is like the fundamental metric that kind of ties every development to. And so, you know, I was telling people like, four years ago, we started this company called the K2 because we wanted to help make humanity a type two Kardashev civilization, right? Like, one that's able to harness massive amounts of energy, right? Hallmark is the Dyson sphere. Yeah. At the time, I had to explain, like, what is a Kardashev? Right? Like, nobody knew what that was, and now everyone Elon is like, I know exactly what that is. I know how it works. And so for us, like, the whole idea is keep pushing the bounds of power so that we can have even more compute. We can have even more comms. And over time, like, every single infrastructure play we're gonna wanna do in space is gonna tie back to power, maybe a bit of mass as well, but, like, all of those require going built you know, building bigger effectively. Effectively. Mhmm.

Speaker 1: On heat radiation in space, that's been sort of one of the sources of, like, fear, uncertainty, and doubt around the data center in space plan. There's I've seen really, you know, thoughtful takes from scientists on both sides. My question is more on where that intellectual property, that R and D will happen. Because if this were fifty years ago, we'd probably be like, it will be done at DARPA and NASA, and it will be in the public domain, and every company will be able to benefit from it. We're now in this world where some of that might happen at SpaceX, and that might be sold or licensed. But

Speaker 5: are you going to be working on that particular technology? Do you see multiple companies creating standards around it, or is it just sort of a a horse race between every company where everyone will have their own solution, maybe the best one wins? How will that play out? Yeah. Yeah. I think I think the evolution is gonna be there's a conventional way to solve the thermal problem even at the 100 kilowatt class satellite. Right? Like, you can do it with the existing technology. It's just an engineering problem more than a a physics or r and d problem. Yeah. Over time, I think we're just going to get more optimal and we're also going be pushing up power more and more where everyone's going to try the new science, right? And so I think you're right. We're going to see a massive amount of capital investment invested in managing thermal and space in a way that was never going to happen in a world where NASA was the only one pushing, you know, the R and D forward. I think it's gonna be pretty cool. I think we'll see, you know, like, how different strategies play out. For now, the next five years, I think it's gonna be relatively conventional. Like, there's not gonna be it's just engineering that's, like, solving some problems that that should be solved. Yeah. I feel like a lot of

Speaker 1: maybe it's sort of all hard tech, certainly space companies. They sort of go back and forth between the dual use opportunities. They'll do some government work for a few years while the commercial sector sort of catches up, then they'll flip it, and all of sudden, the revenue will be 90% commercial. Are you on that sort of roller coaster as well? Do you see you do do you see the company going through phases of, well, we're doing a lot of government contracts, but we ultimately wanna have a big commercial business or vice versa? How do you see the the trade offs there playing out? Yeah. We've always seen it as like both. Right? Like, I'm gonna be about fifty fifty in our business. Like, the first big contract we announced this year was a massive commercial contract for 30 satellites that we're gonna deliver in 2028. Yeah. The second contract after that was partnering with Andriel on Golden Dome. Sure. So for us, the whole goal is to be able to build this super performant platform that we can use for national security and commercial missions. Yeah. Yeah. That makes a lot of sense. Do you think hyperscalers and big telecom companies over time will feel like they need in house

Speaker 2: space in a in a more meaningful way. Like, now, it feels like having a specialized partner makes a lot of sense. But then as space becomes a more important part of, like, let's say cloud and and, on the telecom side, it's just like general communications. Like, you could imagine that them thinking, like, wait. We should try to buy a company like K two because this is too important for us to just be entirely reliant on an external partner. I can see it going both ways, but I'm curious your view on it. 100% it's going to be a mix, right? If you look at how comms and compute happen on the ground trustfully, right?

Speaker 5: Meta's Like, rolling out their own deep sea fibers. Right? Yeah. You know, Google's partnering with certain neo clouds in a certain way. I think the exact same thing is gonna happen as we take those applications and put them in space. Yeah. It is funny looking at the mag seven, I guess, mag eight now, if you include SpaceX.

Speaker 1: Like, if if the question is just, like, going up high, doing things off of Earth, like Google has the balloon project, and, Facebook was doing solar powered planes for a while. Bezos, obviously, has Blue Origin and Amazon, not directly linked, but there's a play there. And so the the the the the big tech companies are certainly waking up more and more doing deals, but also having stuff in house and outside.

Speaker 2: It's a fascinating market watching it evolve. Yeah. It's interesting to compare launch to just the Frontier labs too. A lot of people realizing like, woah. It's kind of it's interesting not having a Frontier model and and being reliant on another partner. And then on the space side, it's like, hey. We we don't necessarily want just one highly competent launch party Yeah. Or sorry, launch, company. Yeah. So And we've seen that with Rocket Lab and a bunch of other companies in the space economy.

Speaker 1: But Yeah.

Speaker 5: Think that's the coolest part about this. Right? Like, we're seeing, like, a purely capitalist reason to go invest tons of capital in things like launch vehicles. Yeah. Right? Like that's something that didn't exist five or even ten years ago and you know, outside of SpaceX, right? So I think that that's probably like one of the most fun dynamics of this whole orbital compute dynamic that's happening now is everybody's like, wait, to your point, like, hey, launch is just like a, you know, model a and if if I'm the only one that has it, I'm gonna be in a lot of trouble. Mhmm. Yeah.

Speaker 2: I Man, ask I I can't stop thinking how you're kind of office studio mugging us right now.

Speaker 1: We have a pretty big space here Trust us. You have you have a k two space. Yeah. It's amazing. We'll Go bigger. Bigger. Let's go bigger. Excited for the next one. Well, Great great to see you, and congrats to the team on all the progress. Yeah. Thanks so much for taking the time to come chat with us. Have a great day. Cheers. We'll talk to you soon. Let me tell you about the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange.