News Article

Tom markusic out as Firefly CEO 3 months after AEI takes majority stake in rocket company
Date: Jul 17, 2022
Author: Douglas Messier
Source: ( click here to go to the source)

Featured firm in this article: Firefly Space System of Cedar Park, TX

Firefly Aerospace co-founder Tom Markusic is out as CEO, a move that comes three months after AE Industrial Partners (AEI) led a $75 million Series B funding round and completed its acquisition of a majority stake in the rocket company.

Firefly announced this week that Markusic transitioned to the role of full-time board member and chief technical advisor on Thursday, June 16. He remains "a significant minority investor" in the company, which is preparing for the second flight test of its Alpha small-satellite booster.

AEI partner Peter Schumacher has taken over as interim CEO while Firefly searches for a successor.

"I'm proud of the company I co-founded and built, and confident that Firefly is well positioned to seize upon the tremendous opportunities and investment in the space industry today. The future for Firefly is bright, and the time is right for a new leader with the necessary skills to lead the company into its next stage of growth and development," Markusic said in a press release.

"Tom has worked tirelessly over the last eight years to start and build Firefly into the innovative company it is today, and we thank him for his vision and leadership," said AEI partner Kirk Konert. "With new ownership and funding, Firefly has been reinvigorated. The Company is entering a new phase of growth, highlighted by the upcoming second launch of Alpha, Firefly's flagship launch vehicle, this summer. We are confident that we will soon find the right person to build upon this momentum and collaborate with the talented Firefly team to help the Company continue its success."

Firefly has shipped both stages of its Alpha rocket to Vandenberg Space Force Base in California. The company anticipates launching the booster for the second time this summer.

Alpha is a two-stage, 29-meter tall booster that is designed to deliver 1,000 kg (2,204 lb) into low Earth orbit (LEO) or 630 kg (1,389 lb) into sun-synchronous orbit (SSO). The rocket's first stage is powered by four Reaver engines, its second stage by a single Lightning engine. All engines are powered by RP-1 and liquid oxygen.

Alpha's maiden flight failed last September after one of the first-stage Reaver engines shut down about 15 seconds after liftoff from Vandenberg. The partial loss of thrust caused the rocket to tumble out of control 2.5 minutes into the flight.

Firefly said in its press release that it had recently completed the integration readiness review with NASA on the company's Blue Ghost Lunar Lander. The U.S. space agency is paying the company to deliver payloads to the surface of the moon under the Commercial Lunar Payload Services program.

Firefly added that it has begun development of its Beta medium launch vehicle with the goal of conducting the maiden flight in 2024. Beta is being designed to deliver 8,000 kg (17,637 lb) to LEO or 5,800 kg (12,787 lb.) to SSO.

A Long, Winding Road to Orbit

Markusic departure as CEO comes more than eight years after he co-founded the similarly-named Firefly Space Systems with Michael Blum and P.J. King in January 2014. The years that followed saw a lawsuit filed by Markusic's former employer, Firefly declare bankruptcy after it ran out of money, the company revived under a new name by an Ukrainian businessman, a lawsuit filed by the original investors alleging that Markusic defrauded them, and the federal government order the Ukrainian investor to sell all his interest in Firefly.

Markusic founded Firefly after stints at SpaceX and Virgin Galactic. At Virgin, Markusic headed up rocket engine development for the company's LauncherOne booster. Virgin Galactic planned to air launch the rocket using the WhiteKnightTwo aircraft when the mothership wasn't being used to launch SpaceShipTwo suborbital flights. The company later spun off the venture as Virgin Orbit, which developed a more powerful version of LauncherOne that is released over the ocean by a modified Boeing 747.

In December 2014, Virgin Galactic filed legal action alleging Markusic and Firefly had stolen intellectual property (IP) that belonged to the launch provider. The Richard Branson-backed company, claimed that IP related to an aerospike engine that Firefly was developing to power its rocket. The legal action was eventually settled with Firefly agreeing not to develop the aerospike engine.

In the fall of 2016, a major European investor backed out of plans to provide funding to Firefly. Company officials said the decision was unrelated to litigation by Virgin Orbit. Instead, the move was related to Brexit, the United Kingdom's decision to end its membership in the European Union. Firefly ended up ceasing operations on Dec. 1, 2016 after it ran out of money.

During this same period, Markusic began negotiations with Ukrainian entrepreneur Max Polyakov about investing in Firefly. Instead, Polyakov ended up purchasing the bankrupt company's assets at auction in March 2017. Firefly Aerospace was created with Markusic as CEO. A research and development center was established in Dnipro, Ukraine.

Blue, King and other original investors subsequently filed a lawsuit alleging that Markusic committed fraud and intentionally bankrupted the original Firefly in order to make a deal with Polyakov and cut them out of the company. Markusic and Polyakov have denied the claims. The lawsuit is pending in a California court.

In November 2021, the Committee on Foreign Investment in the United States ordered Polyakov and his investment firm, Noosphere Venture Partners, to sell a stake in Firefly on national security grounds. The Ukrainian businessman angrily denied he posed any threat. Polyakov sold the stake to AEI.