Closing Bell - Manifest Space: Varda Closes $187 Million Series C Round with Varda Space CEO Will Bruey 7/11/25

Episode Date: July 11, 2025

Varda Space, an in-space manufacturing startup, has just raised $187 million in a Series C round led by Natural Capital and Shrug Capital. Since its inception four years ago, Varda has completed three successful missions, with a fourth in orbit and fifth expected by the end of 2025. Co-founder & CEO Will Bruey joins Morgan Brennan to discuss drug manufacturing in microgravity, hypersonic testing and more.

Varda Space just raised $187 million in a Series C round led by Natural Capital and Shrug Capital. CEO and co-founder Will Brewe says the funds will help the startup realize greater scale. What the Series C allows us to do is two big things. First is increase cadence, meaning more flights more often, so the rate of flying. And also allows us to build out our biologics lab, which is our way of determining which molecules, which drug molecules make sense to send to microgravity through a bunch of testing on the ground and then preparing that formulation for flight.

And so this is, this whole series C is really about scale. More spacecraft and more drugs in them. Varda Space is on the forefront of the nascent manufacturing and space market. It has developed a small spacecraft that can carry several kilograms of payload into orbit, where it can, for drug makers and others, support microgravity experimentation, autonomous manufacturing, hypersonic experiments, and more. To date, four-year-old Varta has completed three successful missions. Its fourth is currently in orbit and a fifth is expected before the year is out. On this episode, Varta's Will Brewe on drug manufacturing and microgravity,

hypersonic testing for the government, and a business model that swaps FedEx for SpaceX. I'm Morgan Brennan, and this is Manifest Space. Joining me now, Will Brewery, the CEO of Varta Space, and Will, it's great to speak with you. Great to speak with you too, Morgan. So, Series C funding round, you just raised $187 million. Break it down and what it's going to go towards. Yeah, sure.

So to give some context here, the purpose of Varta is to build drug formulations using microgravity in outer space. Because we can make drug formulations that you otherwise couldn't make on Earth due to gravity. And when I say formulation, I'm talking about going from a pill to an inhalable or an IV bag to a shot. And so by removing ourselves from gravity,

going to microgravity, we can open up the envelope of what drugs are possible. So over the last few years, we've shown some demonstrations of that through proof of concept. We've built a spacecraft and flown it now three times with a fourth in orbit right now. And so what the series C allows us to do is two big things. First is increased cadence, meaning more flights more

often, so the rate of flying, and also allows us to build out our biologics lab, which is our way of determining which molecules, which drug molecules make sense to send the microgravity through a bunch of testing on the ground and then preparing that formulation for flight. And so this is this whole series C is really about scale, more spacecraft and more drugs in them. Okay, I want to get into the biologic piece of this because that sounds especially interesting to me, but first just a little bit of background. You've done three successful missions so far. You have a fourth on orbit right now,

and you're still planning to do a fifth before the year is over? Correct. Okay. What goes into these missions? Yeah, so each one of these is, what we do is we build a spacecraft, and it's kind of two parts.

It's the spacecraft and then the reentry vehicle. And you can think of them as a single whole. And they get launched up on a commercial rocket like a SpaceX Falcon 9, and then with a bunch of other satellites. Once they're in orbit, and actually quick pause there, that's part of the reason why we're able to keep costs so low is because we share the rocket launch

with over 20 other satellites, so that we're only paying for a fraction of a launch cost. So VARTA, we only think about launch as a utility, as shipping. Now it's more expensive shipping than FedEx, but when you're carrying a product as valuable as pharmaceuticals, then it's just a drop in the bucket.

And so once we're in orbit, once we get to orbit with the rest of the other satellites, now we're in microgravity, so that when we formulate those drugs, when we run them through a process to crystallize the drug molecule, it behaves differently because it's outside of microgravity. So we create a different result

than what would be produced on earth. And so that different result allows us to change the formulation, like from an IV bag to a shot, which is a better patient experience, obviously. Once the process is done in orbit, we do a reentry burn, meaning that we steer the spacecraft back to Earth, we fire some rockets, and we hit the Earth's atmosphere going Mach 25. And that's also a separate line of business for the Department of Defense that we can

talk about. And then once that capsule hits the atmosphere, it slows it down tremendously from about 25 times the speed of sound to a nice parachute landing softly on the desert floor where we then pick up the capsule with the unique drug products that are still unique. Those microgravity characteristics are locked in and then we deliver them to our pharmaceutical customers and our labs for further analysis. Who are some of your pharmaceutical customers and what are some of the drugs that you have flown? So we focus mostly on top 20 pharmaceutical companies because they have the largest portfolios, meaning that we can look through the list of drugs

that they have in their portfolio and identify which ones make the most sense for production in microgravity. And so that's a lot of what the series C is for, is developing the lab to vet the gravity impact on the formulation so that we know a priori before going to space of what to expect the chemical reactions to be in microgravity.

And let's see, what else? I guess that's basically the whole concept. Yeah, I think your first mission, you were flying Ratanavir, right? Yeah, that's basically the whole concept. Yeah. I think your first mission, you were flying Retonavir, right? Yeah, that's right. Yeah, sorry. I blanked out on the second part of your question. Yeah, the drugs we've flown so far reflu Retonavir, which is an AIDS HIV drug on our first mission

as a demonstration. And that drug is famous because it was recalled in the 90s. And the reason it was recalled was because they discovered a new form of the crystal after they went to production that kind of spoiled the batch. And so that's something that Varta could have prevented and was a good example of the capabilities that we have. We also flew a commercial asset on our second mission. And now on this fourth mission, we're

flying a solution-based formulation, which is basically a demonstration of the hardware that we can now perform more operations, more processes on our drugs in orbit, very similar to how the pharmaceutical industry does it on Earth. So it's kind of a very familiar apples-to-apples replacement. So it's kind of a very familiar apples to apples replacement. Got it. So the biologics lab, why is it so necessary for you to build that out? I mean, I think about some of these pharma companies, they have these huge R&D departments and laboratories and they're very sophisticated.

So why are you doing that research ahead of these missions? Yeah. So quick context here is you can think of drug molecules as broken into two major groups. Small molecules, so that's things that are created in a lab like Tylenol, Advil, and then biologics. Those molecules are much more complex and they, like proteins, for example, chemotherapies, and those are created from a biological process, hence the name biologics. Microgravity has a great

impact on biologics in that we can control how they crystallize differently in microgravity. They're also more complex molecules. So like you said, it takes a large lab to analyze these molecules and prepare them for flight. And what we do in that lab is we, you can't decrease gravity on earth, but you can increase it. So we put the, by spinning something around. And so we put those drug reactions into a centrifuge and see what happens at higher gravity. One, two, three, four, five times the gravity that you feel on earth. And that allows us to see the sensitivity of how, of gravity's impact on those drug molecules and that drug formulation so that we can extrapolate down to microgravity and have an idea of what

will happen when we get to space. So all in all, what our for our pharmaceutical lab does is it gathers a bunch of candidate molecules, which of these drugs would be best to improve the formulation with microgravity, then develop a formulation specifically that utilizes microgravity for improvements, and then we can fly that molecule. Interesting. So like a pharma partner or customer will come to you and say, I have these molecules. I'm very curious.

Do the legwork. Make the case, and then take it to space. Exactly, and sometimes we do it the other way around too, where because we have such good intuition of how gravity affects the crystallization process, sometimes we'll work on the molecule first, then approach the pharmaceutical partner and be like, hey, did you know that the formulation can be improved through microgravity?

Here's the data showing it. And we'd love to partner with you to capture that value by developing a formulation in microgravity. Are the companies open to that when you do that? Oh, yeah, absolutely. I think this requires, and you and I have talked about this before, but I'm going to take a step back and just sort of, because I hear this from the commercial space station developers too, is like how huge this opportunity is for microgravity and pharmaceuticals and other types of medical breakthroughs potentially.

I don't think people fully appreciate the market that is sitting there on the nexus of being cracked open here. Yes, totally agree. And the reason for that is because it's always been a bridge too far to access microgravity. And it's only been within the last five years or so that reusable rockets and the commercial launch industry have increased the access to space so much that now it's within reach. And so we've always known about this, like you're saying that, you know, NASA and other

And so we've always known about this, like you're saying that, you know, NASA and other space station commercial space station providers have have known this for decades because the research has been done on the International Space Station. But it's always been cost prohibitive and that just recently changed. So now we're building the vehicles to manufacture those pharmaceuticals in orbit and bring them back to space at scale. And there's a really neat positive feedback loop that Varta is going to ignite to capture that huge market. And the reason for that is if you think about it, right now shipping to space is still more expensive shipping than FedEx, right? So there's the drugs need to be valuable enough to rationalize going to space. So there's some drugs that we can't work on right now

because they're not economically viable. So, but as we scale up our cadence and our flight rate, that means our costs go down thanks to economies of scale. And that brings down the threshold of what drugs are viable in microgravity because now we can do it for cheaper. And so by flying more drugs, that opens the list of now more viable drugs,

which opens the list of more viable drugs. And you get this positive feedback loop such that so on and so forth as our costs go down, the number of drugs we can make go up. And that fuels itself. It's super interesting. OK, I want to go back to Biologics Lab because it seems to me you're laying the foundation,

the infrastructure, if you will, longer term to be able to start to formulate some of these crystals yourself. Is that something you're considering maybe down the road? Oh, we've done it already. Yeah, so yeah, we've crystallized biologics that never been crystallized before. We are creating a lab to do exactly as you just described. But we have already kind of... Can you be a drug maker ultimately? Like a new space age drug maker? So specifically the formulation, you know, where we want to sit is specifically

in offering a microgravity enabled formulation. We don't synthesize the molecules, we don't design the drug molecule, we don't discover drugs. But once a drug is discovered and it's known to do something beneficial to the human body, then where we come in, we say, okay, how do we go from molecule to medicine? Does that become a profit sharing model? How to think about that? Yeah, exactly. So we want to share in the equity of the drug assets. So typically, if you look at the value chain of a drug asset, the formulation developer, whether it be in-house or out of house of a pharma company, will capture 2% to 7% of the total drug asset. And so that's where we sit. And we partner with these pharma companies saying, hey, we would like to share in the downstream royalties, we'll help take on the risk with developing this formulation. But should this drug go to market, we'd like to capture some royalties

at that point. Now you mentioned hypersonics and this has become a big area in the last, and a number of companies including yours have gotten contracts to do all the hypersonic testing and capabilities. So let's talk about that business model too. Yeah, so the bookmark I was talking about earlier and the fact that this capsule is when it goes from space to earth, that's kind of just part of the day-to-day operation at Varta. And, but what's nice is no other commercial company

is re-entering capsules at this rate. And so we have a unique, low-cost, high-cadence re-entry vehicle that's constantly going through the atmosphere at Mach 25, which is actually a very unique thing. And so the Department of Defense, who is interested in designing heat shield materials and flight computers and radar systems and navigation systems. And they wanna test it in this extreme environment. It's very expensive to access that extreme environment unless you're a commercial provider like Varta

that is flying through that environment anyway on a regular business basis. And so the way the Department of Defense thinks of us is like a hypersonic wind tunnel. So everyone's kind of familiar with a wind tunnel on earth to develop airplane wings and test out airplanes before putting humans in them. But the problem is that you can't create

a hypersonic extreme Mach 25 flow at scale with all the energy and the chemistry involved and the heat on earth. You actually have to do the real thing. And since we're flying through the real thing regularly, we can offer the Department of Defense access to that environment for their payloads by putting them in the capsule

alongside of our pharmaceuticals. And so you've already been doing that. Right, exactly. So we did that on our third mission. We did it on our second mission as well. And so we can offer the service of testing in an extreme environment on a regular basis that's never been at this cost or cadence before

to the Department of Defense. Typically, they would have to buy a whole dedicated rocket just to test a heat shield at Mach 20. And now they can just buy a ride along in much the same way that we buy a ride along from our launch provider. So we're kind of passing that capability and that savings on to our government partners. Super fascinating. Okay, so how does this set you up not only for and you just raised another funding round. How does all of this set you up not only for the second half of 2025,

but beyond 2026 and into the end of the decade? I guess how to think about the timeline to hit all of these milestones as you grow these businesses? Yeah, so this funding round is largely about exactly that growth and repeating and scale of what we've demonstrated more frequently. So that means more flights and more drugs involved. and scale of what we've demonstrated more frequently. So that means more flights and more drugs involved.

So this funding round is going to go towards four flights this year, four flights next year, which is, and the last two flights of next year are very exciting because they will be on the same rocket. So as the rocket gets to space, we'll have two Varta vehicles come off at once, each with a different either drug or government test. And that's a great unlock for us because the key metric of success for Varta period is cadence, is the rate. And so being able to do multiple spacecraft and multiple reentry vehicles on a single rocket launch is a huge unlock for us to be able to really scale that cadence. So that's next year's milestone. And then from there, we just want to scale cadence as fast as possible. Space drugs sound super complicated,

and it is, but at the end of the day, it's just more drugs and more spacecraft is kind of the answer to the growth of Varta. So when we looked at 2030 and beyond and you see some of these commercial space stations start to come online, do they become competitors or is there opportunity to partner with them? Oh, big time opportunity because those commercial stations are built for humans first and manufacturing second, which means they're great for research and development of how microgravity works. But

they're not necessarily as great for mass manufacturing. Whereas Vardis spacecraft are built for manufacturing first and don't even have to worry about all the humans. And humans are the most complicated part of space because you got to keep them alive compared to just some inanimate object of drug molecules. And so our cost and cadence can be much higher because we don't have to worry about the, you know, the expensive meat sack that is a human and all the engineering and safety that's required for a human life on board.

So those stations are very complimentary and very helpful for us. In fact, the many of the drugs we're working on now, or at least the concepts behind them were first developed on the International Space Station, which is a human-rated station, but again, was cost prohibitive to do mass manufacturing commercialization of all that research. And that's where VARTA steps in. We're kind of the commercial off-ramp for the research.

So the more human-rated stations that are doing research that we can partner with and then commercialize, the better. And then the capsules, they're reusable? Oh, yeah. That's, yeah, absolutely. partner with and then commercialize the better. And then the capsules, they're reusable? Oh yeah, that's yeah, absolutely. So the long-term vision of Varta is to be shipping these on a daily basis. And so you can kind of think of our capsule,

if you think about Dragon at SpaceX is like a semi-truck sized vehicle, ours is just a small little Amazon delivery van. But both of those vehicles are needed in transportation. And so we focus on the small, high rate things, like pharmaceuticals. And we want to go into a fleet mentality where we're launching these every day.

So the entire vehicle will be reusable. And when it gets back home, we just take off the drugs that were manufactured in orbit, put in a new precursor for making more drugs and launch and reload again. And so, yeah, reusability is key. And eventually we wanna get to a place where we are doing this on the daily.

So that if you think about yourselves as the pharmaceutical customer, what Varta is, they actually don't really care that we're going to outer space. They just care about the drug formulation. And so they think about us as just a gravity off switch in their bioreactor or in their drug development facility. And so the pharmaceutical industry will ship in situ of development and manufacturing right

now. For example, you'll do synthesis in San Diego, formulation in New Jersey, dosing in Ireland and packaging in North Carolina. So adding one more shipping step along the way to capture all of this value is no big deal as long as we at Varta can make shipping to space and back just shipping.

Pay no attention to the rocket behind the curtain. We use SpaceX instead of FedEx, but the concept is exactly the same. We're just a zero gravity oven in this analogy. All right. Will Brewe of Varta Space. Congratulations on that. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching

our coverage on Closing Bell Overtime. I'm Morgan Brennan.