When did you establish Gilmour Space and what prompted you to build a company that launches rockets?
AG: We started the company in 2012 but we started building rockets in 2015 and I was an ex banker, I did a lot of research on the space industry and looked at getting into the space industry. I was initially looking at space tourism, but after a lot of analysis I realised access to space was still the most difficult aspect of the space industry and that there weren’t enough rockets to launch satellites into space so i decided ok i’m going to get involved in that. I did a lot of research on why rockets were expansive and how could we make them a lot cheaper and that’s pretty much how we started.
How big is the company and what are it’s plans for raising capital?
AG: We have 50 people now in the company and we’ve raised two rounds of Venture Capital and a total of $26 million so far…we’re not planning on raising at the moment, we have enough cash flow to last for a while and we were planning to raise next year but our investors have told us to be very careful about managing our cash and making sure we have enough runway to last towards the end of next year which is what we’re working on.
What’s the plan for the next 12 months and how has this changed since COVID-19?
AG: We were planning to raise money in September or October this year to accelerate. We have basically hit a level where we’ve tested enough technology and we are very confident things will go well. So we wanted to raise money so we could get more machines, but really hire more people. We really need another 20-25 staff as quickly as we can to develop a rocket. So we were very disappointed that COVID came, all the investors got very gun shy and then we were told by our main investors to hold where you are and conserve your cash. If you’re going a bit slower we’ll still take it, cash is king right now. It’s slowing us down and that’s annoying.
What’s the best use of your time over the next little while until things settle down?
AG: We’re still testing technology, still doing rocket engine tests, we did an engine test yesterday, another one today, all the different subsystems of the rocket. We’re still doing a lot of design work and were going full steam ahead with that. Nothing has really slowed us down from COVID’s point of view of restricting business. It takes a lot longer to get parts from overseas and that’s impacting us a bit. So some of the components we are buying from overseas might take a month extra so we have to wait a month extra to test something, which is difficult but otherwise, we’ve been pretty lucky. We’re doing a lot of design work and we can do that from home. We’ve been swapping out our staff 50/50 each week. We’ve been able to do a lot of work from home, because we can do that work at home and that’s been pretty good. If it was a year later and we were building the rocket in the factory it would impact us more.
What type of skills have you found locally and what skills do you have to look for overseas?
AG: There’s not alot of experience in building rockets in Australia. So generally what we’ve tried to do – all the heads of the departments have been foreigners and we’ve got them from companies around the world that have experience in building rockets. But most of the people under them don’t need that much experience so most of the people under these managers are from Australia. Alot of graduates and people with 2 or 3 years experience. We’re still looking for a couple more people that have 5-10 years mechanical engineering experience. They seem to be coming out of the oil and gas industry and we’re going to embed them in the team as well.
Have these senior executives come to live in Australia or are they working remotely?
AG: They’ve come to live in Australia, so they’re all living on the Gold Coast.
Who are your customers, what kind of customers do you have now and what kind of customers more importantly do you want?
A: Most of the pipeline of deals we have got and contracts we’ve signed so far are with overseas customers. We knew that from the start. The business we’re in is a global business so there’s satellite companies all over the world – Asia, North America, South America and Europe. There are some satellite companies in Australia but they’re not very big. We’d love to launch them as well. The piece we’re missing right now is any Government business. We haven’t gotten any launch contracts from the government yet or the Defence force. We’re talking to them, we’re hoping we will get some in the future, but as of now nothing.
Is that because they’re not doing anything or because they haven’t bought from you yet.
AG: They’ve been very sporadically buying launches and satellites. They want to be more proactive, they’re building up the case and organising themselves. We predict in the future they will be, quite a bit, especially Defence, they want to be a big buyer of launch and a big buyer of satellites. So they’re not dealing away with someone else at the moment, so it’s really when they get themselves together and start the new program.
If we were writing your press release in 24 months time, what are the sort of things that you would be talking to me about then?
AG: In 24 months time we’re imminently launching our first rocket into space. So we’d be showing you photos of the rocket on its way to the pad and we want to have at least 5-7 launch contracts done by then. Some of those we want to be from Defence and our government and the rest we want to be from overseas customers. One of the points we definitely try to make for the government, is we are not a domestic business, we are an exporting business, our customers are international. So that’s what we want to make a lot of noise out of.
What is the one thing in a couple of years’ time in that press release that you would be most proud of?
AG: I think putting the rocket together, it’s a combination of so many different technologies. Australia has no infrastructure for us right now. There’s not an industry that we can lean into to get products, like there is in America for example. In 2 years time when we have an assembled rocket and we’ve assembled everything from the nozzles to the nose cone. That will be a huge effort. Plus we have all the approvals from the Space Agency and a launch site we can launch from in Australia.
So what you’ve chosen to do isn’t necessarily the simplest thing in life. But clearly what you’ve done is decided to make a market. When you make a market and you’re first, it’s slow going, it’s full of risk, but you clearly see that there is tremendous opportunity. How significant of a market can this be in the next 2-5 years?
AG: The market for launching satellites into space right now is between 5-10 billion US dollars a year (AUD15billion) and projection in 5 years is just going to double or triple. We think the market for the smaller satellites that were going to launch in 5 years time will be AUD7-8 billion annually and we want to be a good chunk of that.
What makes what you’re offering special? What is your value proposition?
AG: Our value proposition is we’ve designed a rocket with technology that we think is vastly simpler than other propulsion elements. We have technology called Hybrid Rocket Engines and we think they are a lot simpler than the manufactured ones so far they have been. Also because we don’t have the same resources as some of our competitors, we’re a lot more careful with our money and we’re designing for cost. That is a very foreign concept in aerospace – to design for cost. Because normally you don’t have to worry about cost, but we certainly do. What that results in is a very inexpensive launch fee.
So I remember when Hyundai came into the market, they built a car for a price, is that essentially what you’re talking about here. You’ve set a price and you’re manufacturing to that price?
AG: Correct, we’ve set a price that we’ve talked to customers about and signed contracts with. That we’re confident, below that price, that we can make a profit. It is a level that customers all over the world very importantly think, is an enabling price for their business. A lot of our competitors are so expensive is not profitable to have a satellite business, but with our price, they can. That’s a big difference.
What are your environmental guides, the guard rails within which you’re working? How much care do you want to take in terms of what you send up, and how you manage what’s up there?
AG: We look at environmental risk from on the ground, when we launch what comes out of our rocket – what’s the exhaust? We’re very happy to say we have a green propellant system, so the only thing that comes out is CO2 and water at levels we can manage by planting literally an acre of forest for every rocket we launch which isn’t a big deal, so we’ve already looked at that. Then in space we want to make sure we don’t have debris hanging around in space and our propulsion system is fantastic because we can start and stop our engines multiple times. So we have the ability, unlike most of my competitors of deploying the satellite, turning the engines off and on again, slowing down and then de-orbiting so it doesn’t stay in space and cause space junk.
How are you managing the physical launch pad, where it’s located, how you get to it, sustain it, support it?
A: That’s a very good question, it’s a tricky situation because what we see in the other countries is the government provides the infrastructure. The way the government provides for airports, train stations. The government hasn’t been willing so far to pay for the infrastructure. Doesn’t need to be a lot of money. We’re looking at between AUD10-20 million to set up the launch site. When you set up a launch site you have to be somewhere a long way away. Very remote, remote is key. Not near any big towns or air traffic or shipping. So we were looking at North Queensland and another one in South Australia. Both have really good locations to set launch from. Both remote. We’re working with a company in South Australia that’s managing the site and directly with the Queensland government for the Queensland site that we will have a lot to do with.
What are the sort of opportunities that a company and industry like yours will create for Australians coming into this space?
A: Quite a lot. Rockets are complicated so they need a very diverse amount of talent. So if you just look at engineering, we hire electrical engineers, chemical engineers, mechanical engineers, aerospace engineers, physicists for our orbital mechanics stuff and then we also have people in finance, in marketing, human resources and then we have a whole lot of people that we will need in the future that are manufacturers. These are the people that will come out of the TAFEs: machinists, fabricators, welders and electricians. We’re going to need about 100-150 of these people and the bigger we get we’ll need 400-500 people so it’s a very diverse set of skills we need.
Are there any industries where you can repurpose skills? Can we transition workers out of existing industries in Queensland for example where demand for their goods and services will drop over time and reskill them and bring them into your own industry?
A: The two main industries we believe we can get people from is the oil and gas industry and the car industry. So there’s obviously big differences between a car and a rocket but not as big as you think. So a lot of the skill sets we think we can use, and then a lot of the skill sets in the oil and gas industry are very good to manage our launch operations. All the pipes that go from storage tanks into the rockets and stuff like that.
What kind of organisations sit in your ecosystem?
A: We already deal with about 300 different suppliers. That’s everyone from the nuts and bolts to the metal, machining, marketing supplies, computers, desks, stuff like that. I’m always amazed when I look at my list of who we pay money to, how many different types of people we pay money to.
Most are overseas at the moment but what opportunities exist for Australian suppliers?
A: Oh, it’s all Australian suppliers. We do buy some components from overseas but we have over 300 Australian suppliers and I wouldn’t say we’re all that big right now.
If you were briefing the Prime Minister, what opportunities would you be talking about specifically in terms of a great place to invest and for the sort of return that we haven’t already talked about?
A: What I look at, especially with my banking hat on, is how many jobs can you create for the amount of dollars you invest. If you look at a very successful rocket company like SpaceX, they have 15,000 employees now. Some of the other rocket companies have about 10,000 employees, that’s just in one company. If we become successful, and there’s another company that becomes successful launching, that’s already, just in our company that’s 10,000 people. Then there’s probably another 10,000-20,000 people in very adjacent industries. The amount of money you need to get to there is hundreds of millions of dollars, low hundreds of millions of dollars not billions of dollars. So I look at the governments that invest billions of dollars in the defence projects and those employ 500 people and I could employ 500 people for a couple of hundred million dollars, so bang for your buck space is good!
That seems like a great place to end, is there anything else you wanted to raise today?
A: No, I think we covered everything. We were not going to give up. We can’t wait to grow. We can’t wait for this thing to finish and the investors to come back.
The judges of the Advance Awards made a great decision in selecting you as the Advance Manufacturing winner in 2019 and I’m really excited to have had this conversation with you. I cannot wait to see this company fly!
A: Thanks Maria it’s my pleasure.
FURTHER INFORMATION
Find out more about:
- About Adam Gilmour
- About Adam Gilmour’s journey
- What motivates Adam?
- Adam’s acceptance speech at the Advance Awards 2019
- About Gilmour Space Technologies