Innospace on track for IPO after successful test rocket launch

A successful launch of the first civilian-made space rocket HANBIT-TLV by Innospace. [Courtesy of Innospace]

South Korean aerospace startup Innospace is steadily progressing towards an initial public offering (IPO) after achieving a significant milestone with the successful launch of its test rocket. On March 19, at the Alcântara Space Center (CLA) in Brazil, the company’s HANBIT-TLV launch vehicle, adorned with the Taeguk emblem, roared into the skies.

The rocket soared smoothly for 4 minutes and 33 seconds, gracefully descending into the predetermined area off the Brazilian coast. With normal engine performance and confirmed stability, the launch was an unequivocal success, underscoring the potential of commercial rocket launches by a South Korean private company, particularly one established just six years ago.

Following the test launch, Innospace secured 15 billion won ($11.20 million) in pre-IPO funding. The company recently submitted its application for professional technology evaluation, a crucial step for listing on the country’s secondary Kosdaq market. As Innospace gears up for the due diligence process, it has ambitious plans. The company aims to initiate a preliminary listing review with the Korea Exchange by year-end and complete its listing in the first half of the subsequent year. Mirae Asset Securities Co. is the lead IPO underwriter.

In an interview with Maeil Business Newspaper on Monday, Innospace’s CEO, Kim Soo-jong, maintained a composed demeanor despite the excitement surrounding his company’s accomplishments, which have earned it monikers like the “SpaceX of Korea” and “Rocket Lab” after the successful overseas test rocket launch.

“It was only a test launch. There are still challenges on the road ahead,” he said, noting that the company needs to generate revenue and profits after becoming a listed company, which is a significant burden for the company.

Kim also acknowledged the complexity of orbital launches, saying that sending a satellite into orbit is no easy feat, even for organizations with extensive experience such as the Korea Aerospace Research Institute and Space Exploration Technologies Corp. (SpaceX) in the U.S., both of which have encountered setbacks. He revealed that Innospace is calmly preparing for its next launch, projected for the end of the following year.

Innospace’s CEO, Kim Soo-jong. [Courtesy of Innospace]

Space development has traditionally been a state-led endeavor due to its astronomical cost and lack of economic viability. With SpaceX’s success in developing reusable rockets, however, the cost of reaching space has dropped to less than a tenth of what it used to be. As the barrier to entry for space has lowered, not only countries without satellite capabilities but also numerous companies are venturing into space development.

According to a report by the Ministry of Science and ICT, the global space industry grew to $386 billion in 2021 from $339.1 billion in 2016 and is expected to exceed $1 trillion by 2040.

Innospace has set its sights on the market of small launch vehicles in the expanding space industry, which involves placing satellites and payloads weighing between 50 kilograms and 500 kilograms into space orbits.

“Small satellite operators can use large launch vehicles like SpaceX, but it is not easy to meet the desired time or orbit,” said Kim. “In the end, to effectively utilize satellites, companies that specialize in small satellites are required, and only U.S. Rocket Lab Inc. and Chinese companies have succeeded in launching small satellites in the world.”

Due to the U.S.-China conflict, it is virtually impossible to use Chinese rockets, so there are no companies other than Rocket Lab that can put small satellites into orbit, Kim explained. “Since Rocket Lab has closed its launch plan for the next three years, we have been receiving inquiries from various places as we are the only company other than the Chinese companies that have succeeded in launching suborbital or higher launches for commercialization.

By targeting the small satellite market, Innospace aims to achieve 130 billion won in revenue by 2026 and a 3 percent market share of the global small launch vehicle market. “We are also working on developing reusable rocket technology to enhance economic viability,” said Kim. “Beyond being a rocket company, we aspire to become a platform company that offers various means for utilization in space.”