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The Hustle Sponsored by Vector, a company that launches small rockets, just raised $70m to help launch these babies into space Vector hopes $70m will get its tiny rockets into space before Elon steals its clients Vector, a startup that...
Vector, a company that launches small rockets, just raised $70m to help launch these babies into space
Vector hopes $70m will get its tiny rockets into space before Elon steals its clients
Vector, a startup that launches small satellites into orbit on a budget, raised a $70m Series B to launch its clients’ space cylinders.
With its new wad of cosmic tickle cash, Vector hopes to launch its first rockets in 2019 before its competitors take off with the market.
Going big by going small
Large space companies are developing heavy, manned rockets (SpaceX’s Falcon 9 weighs 25k kg), but Vector is building small rockets that carry between 50 kg and 290 kg.
SpaceX has launched just 56 rockets in its 8 operational years. But Vector plans to launch more than 100 rockets per year once it gets up to speed.
Vector CEO Jim Cantrell toldCNBC he plans to do “essentially what Henry Ford did with the automobile assembly line” -- except with rockets.
Tiny satellites, big market
Small satellites are the fastest-growing segment of the $260.5B global satellite industry, and investors pumped $1B into space startups in just the first quarter of 2018.
But to capture market share, Vector doesn’t just promise small rockets -- it promises small prices. While SpaceX Falcon 9 launches cost $62m (with bulk discounts available for “contractually committed, multi-launch purchases”), Vector launches will cost only $3m.
So, who would buy a $3m, microwave-sized rocket? As it turns out, plenty of businesses.
Small businesses want their names up in ’lites
Farmers, urban planners, emergency responders, and shipping companies will all pay for satellite eyes in the sky. But unlike internet giants, they’re on a budget -- inspiring startups to compete to lower costs.
Virgin Orbit offers $12m launches and Rocket Lab offers $5.7m launches. But big rockets are also a threat: SpaceX now sells “rocket rideshare” tickets for just $200k -- and it has 1k seats.
While these cosmic hitchhikes don’t offer control over timing or placement, they’re better than nothing until Vector (or a competitor) offers a cheaper ticket to the stars.
The rocket’s on the docket
Old oil: Sentinel Energy buys company that specializes in repairing ancient pipelines
Bloomberg reports that Sentinel Energy announced it will buy Strike LLC, a company that specializes in repairing old pipelines, for $854m.
Building brand new pipelines is expensive, so it only makes sense that the market would come about; the question is, what took the industry so long?
Just slap some duct tape on it and call it a day
The US oil and gas business is one of the oldest in the world, and with more than half of the US oil pipeline networks dating from the ’60s or earlier, the pipes aren’t getting any younger.
According to the Association of Oil Pipelines, America’s older crude oil and refined product pipelines make up a staggering amount of leaks that can lead to massive environmental and life-threatening implications.
Now, with new tech comes a new market, and companies are getting their pocketbooks ready to invest in companies that upgrade oil infrastructure.
Everyone’s doin’ it
Back in July, First Reserve Corp., a private equity giant specializing in energy, purchased Dresser Natural Gas Solutions, a company that makes natural gas meters and pipeline-repair equipment (First Reserve’s 6th investment in the energy infrastructure integrity space).
Once the deal between Sentinel and Strike is complete (expected to occur during Q1 of 2019), it’s expected to go public at Strike Inc. on the NYSE.
The truth shell set you sea: StarKist admits to fixing tuna prices
StarKist Co. has agreed to plead guilty to a felony price-fixing charge as part of a near industry-wide collusion scandal involving the… wait for it… Tuna Council. AKA, the canned-tuna industry’s Big 3.
We’re talking a full-fledged Tuna conspiracy: According to the DOJ, Bumble Bee, StarKist, and Chicken of the Sea executives kept tuna prices artificially high between 2010 and 2013.
Now, StarKist will face fines to the tuna $100m once sentenced.
Rat of the sea
According to court records, the scheme surfaced when Chicken of the Sea attempted to buy the struggling Bumble Bee back in 2015, in hopes of swimming past StarKist for the biggest tuna can in the US.
BUT, before the merger could happen, Olean Wholesale Grocery Cooperative, a food wholesaler in New York, realized something fishy was going on: Raw tuna prices had fallen, but canned tuna prices didn’t.
After putting the pieces together, Olean filed a lawsuit to stop the merger and keep the industry’s already “oligopolistic structure” from turning into a duopoly.
After the merger was blocked, Chicken of the Sea execs agreed to cooperate with federal investigators in exchange for immunity.
The fall of the Tuna Council
Last year, Bumble Bee Foods pleaded guilty to the same charge and paid a $25m fine. Two former Bumble Bee execs (and one from StarKist) each pleaded guilty to price-fixing charges, but have not been sentenced.
Former Bumble Bee CEO Christopher Lischewski was also indicted back in May, but has pleaded not guilty.
Patagonia doubles down on ‘morality marketing’ with endorsement of 2 senators
For the first time in its corporate history, outdoor retailer Patagonia endorsed 2 Senate candidates. The move is unusually political for a for-profit company, but it’s also very ‘on brand.’
As social media makes the payoff of ‘morality marketing’ more immediate, other companies like Nike and REI are also starting to mix business and politics for those sweet, sweet retweets.
Turning politics into PR
Patagonia doesn’t just make vests -- it also has a mission to “use business to inspire and implement solutions to the environmental crisis.”
But environmental activism isn’t just Patagonia’s corporate tagline -- it’s the public cornerstone of the company’s brand marketing. So far it’s worked: Patagonia has the highest customer loyalty of any major outdoor retailer.
Inspired by surveys that show 91% of millennials would switch over to a brand associated with a cause, many other brands are starting to mimic Patagonia’s ‘politics-as-PR’ playbook.
It’s hard to fit ethics into a spreadsheet
The problem with surveys is that just because consumers say they will do something doesn’t mean they will actually do it -- and for retailers, consumers’ actions speak louder than their words.
For companies like Patagonia with well-defined, politically homogeneous customer bases, political marketing campaigns have big upsides and small downsides. But other companies like Nike or Coca-Cola that have larger, more politically diverse customer bases are taking a larger risk.
Nike’s controversial Kaepernick ad attracted 170k new Instagram followers and spiked sales, but since some customers could boycott the company over the long term because of its politics, it is hard to know whether the short-term benefits outweigh the long-term costs.
The future of investing has $2.4B in real estate transactions under their belt
Investing in real estate has been a tried-and-true way to grow wealth for decades. But for waaay too long, nothing forced the industry to change, turning it into a cobwebbed attic of inefficiencies and complexities. For the average investor, real estate investing felt inaccessible.
Fundrise lets anyone with at least $500 invest in institutional-quality real estate projects, but where this investment company really shines is their cutting-edge platform.
Picture an interactive dashboard that lets you see your portfolio’s performance in real-time, easily view the makeup of your assets, and update your investment mix on the fly.
Fundrise’s investor-first model puts you at the helm of your investment (with behind-the-scenes guidance from some serious real estate professionals) -- not a fund manager who’s bloating your account fees, and likely giving you the ol’ nickel-and-dime treatment.
It’s the gold standard of investing experiences, with a silicon sheen. Open a portfolio today and open yourself up to the possibility of seeing the dollars stack.
The finer print: If legal terms and disclaimers are your jam, call this Fundrise page jelly.
monday morning review
Why ‘don’t let ’em see you sweat’ is bullsh*t
Here’s a hot take in the world of “fake it till you make it”: It’s OK to try.
And it’s OK to let people know that actually, you’re trying really, really hard.
A few weeks ago in San Francisco, I went to a show for a band called Smut. They’re a DIY noise pop band from Cincinnati (and if that’s not the hippest sentence I’ve ever typed I’ll eat my vintage jean jacket).
After the show, I complimented the band on their set and -- instead of responding with “cool” or “awesome” or “wanna buy a T-shirt?” -- all the guitarist said was, “Thanks, we’re trying really hard.”
It wasn’t sad or apologetic; it wasn’t a complaint; it was just honest. And it was maybe the coolest thing he could’ve said.
I’ve been thinking about this a lot.
I’m not saying we should all be whining about how hard our lives are to anyone who’ll listen.
I’m just saying that “effort” doesn’t have to be a dirty word; that we shouldn’t have to pretend that we were born charming and successful and knowledgeable for others to respect us; and that showing a human amount of perspiration during the race doesn’t lessen the victory.
This is just to say, we didn’t just walk out of the womb writing business news, we actually tried pretty hard -- and we’re putting our backs into it again this week, just like all the others before it.
It might only be Monday, but between you and me, I’m already sweaty.