Khosla Ventures, others invest $187 million in a startup that wants to make medicines in space

Microgravity-enabled life sciences company Varda Space Industries has raised $187 million in a Series C funding round led by Natural Capital and Shrug Capital, with participation from Founders Fund, Peter Thiel, Khosla Ventures, Caffeinated Capital, Lux Capital, and Also Capital.

The latest round brings the El Segundo-based company's all-time raise to $329 million.

Since launching their first mission, W-1, in 2023, Varda has completed three successful launch and return missions, with a fourth, W-4, currently in orbit and a fifth expected to launch before the end of the year.

The company claims that its orbital laboratories are the first to process materials outside the International Space Station and mark the beginnings of commercial expansion into low Earth orbit. Due to the lack of gravity, materials such as the active pharmaceutical ingredients in medicines crystallize differently than they would on Earth, creating novel drug formulations that would otherwise be impossible, it said.

In addition to its core competencies in the life sciences, Varda operates a hypersonic testbed for government partners, working to utilize the W-series reentry vehicle to advance new technologies. The reentry capsules reach Mach 25 on their journey from space to Earth, offering a valuable, real-world flight environment for testing subsystems such as thermal protective materials, navigation, communication, and sensors.

"With this capital, Varda will continue to increase our flight cadence and build out the pharmaceutical lab that will deliver the world's first microgravity-enabled drug formulation," said Varda CEO Will Bruey.

Varda has expanded its footprint terrestrially as well, opening an office in Huntsville, Ala. and a new 10,000 square foot laboratory space in El Segundo, which will allow its pharmaceutical scientists to begin working on developing processes to crystallize biologics, such as monoclonal antibodies. As of 2022, the market size for monoclonal antibodies is estimated to be $210.06 billion.

"Our new lab space is an investment in our belief that in-space pharmaceutical manufacturing will drive the foundation of the orbital economy," said Chief Science Officer Adrian Radocea. "By expanding, we can support work on more complex molecules and ultimately increase cadence to achieve the turnaround times the pharmaceutical industry expects."

Varda said it has hired a world-class pharmaceuticals team that will work at the new lab in El Segundo, including structural biologists and crystallization scientists with decades of prior experience in structural biology and crystallization across top 20 pharmaceutical companies.

"Through multiple flights, the Varda team has proven a repeatable orbital-reentry capability, attracted serious DoD demand, and is now turning that momentum toward a world-class crystallization lab that will unlock microgravity manufacturing for life-changing medicines and other high-value materials," said Ravi Tanuku, General Partner at Natural Capital and a member of the Varda Board of Directors.