X-Bow Systems Inc., an Albuquerque-based rocket technology company, said Wednesday it raised upwards of $70 million from a slew of tech- and aerospace-focused investors, one week after the New Mexico firm closed an out-of-state acquisition deal that pushed its employee count above 200.
The company, which develops manufacturing systems for solid rocket motors and launch vehicle energetics, and designs and builds modular solid rocket motors and small launch vehicles, said the new money will boost its hypersonic vehicle and solid rocket motor programs.
It'll also support work on a 150-acre "gigafactory" campus the company's building near Austin, Texas, and engineering, research and development facilities expansion in New Mexico, according to a Wednesday news release.
That Texas campus would be the second-largest solid rocket motor production facility by capacity in the U.S., X-Bow CEO Jason Hundley said in a statement, representing an investment of around $25 million and potentially hundreds of employees in coming years.
X-Bow is currently aiming to have its first production line ready at the Texas factory in the third or fourth quarter of this year, Hundley told New Mexico Inno, with the first phase of construction expected to be complete "pretty soon," he added.
The company's also in talks with the New Mexico Institute of Mining and Technology to expand its physical footprint in Socorro, where it handles engineering, research and development work, Hundley said in early July.
Razor's Edge Ventures, a national security-focused venture capital firm based in Reston, Virginia, led X-Bow's $70 million-plus Series B round, the largest raised by a New Mexico-based company this year.
Lockheed Martin Ventures, the corporate venture capital arm of Lockheed Martin; Boeing Ventures; San Francisco-based Crosslink Capital; and Balerion Space Ventures, based in Dallas, joined the round. Union Square Advisors, a tech-focused investment bank headquartered in San Francisco, advised X-Bow on the raise.
"This expansion addresses both critical industrial base and defense needs, and we're grateful for the support of our investors and various industrial partners," Hundley said in a statement.
Global conflicts, including the ongoing war in Ukraine, have "exposed significant gaps" in the solid rocket motor industrial base, Mark Spoto, co-founder and managing partner at Razor's Edge Ventures and X-Bow board member, said in a statement.
"X-Bow's team identified these critical gaps well ahead of the conflict and has built a sizable lead over other emerging suppliers," Spoto said. He added the Series B funding "will enable the company to make an even more meaningful impact in national security."
An October report by Defense News references X-Bow, noting the company became the first new solid rocket motor supplier to the Department of Defense (DOD) "in decades" when it received a $64 million DOD qualification contract last fall. The report also indicates a growing global rocket and missile propulsion market, which could be worth nearly $100 billion by decade's end.
Razor's Edge, Crosslink and Lockheed Martin Ventures all participated in X-Bow's $27 million Series A funding round, announced in April 2022. Ingenuity Venture Fund, the venture arm under Central New Mexico Community College, is also a X-Bow investor.
The company's Series B announcement comes just one week after X-Bow bought Spencer Composites Corp., a manufacturer of composite and metallic structures based in Sacramento, California. The company will continue operations at Spencer Composites' 50,000-square-foot fabrication facility in Sacramento to house prototype development capabilities, Hundley said July 2.
That acquisition brings the company's employee count "well above" 200, he added. More hiring could come with the Series B funding as X-Bow expands its facilities in Socorro and Texas and its testing work alongside Los Alamos National Laboratory (LANL), Hundley said, although he didn't provide specific hiring targets; X-Bow and LANL partner on launch vehicle test capabilities at White Sands Missile Range.
The raise also follows a series of contract awards for X-Bow, which include the falltime $64 million DOD qualification contract, an $18 million Air Force Research Laboratory follow-on contract and, most recently, a pair of rocket motor contracts from the U.S. Navy worth $3.4 million and $4.1 million, respectively.
X-Bow's recent growth — in the form of new capital financing, contract awards and facilities expansion — postdates the company's emergence from stealth in early 2022. It moved to New Mexico from Huntsville, Alabama, three years prior and quickly grew its presence in the state, setting up shop at several research and development, lab, warehouse, manufacturing and office facilities between Albuquerque and Socorro.
It's currently headquartered at 6200 Uptown Blvd. NE, Suite 200, in Albuquerque, and maintains additional presence in Texas, California, Alabama, Utah, Colorado and Washington, D.C.
