CHINESE commercial rocket developer OrienSpace is set to be valued at about 6 billion yuan (US$823 million) in a new fundraising exercise ahead of capital injection, two sources with knowledge of the matter said.

One of China’s emerging privately-owned rocket startups, OrienSpace is looking to raise roughly 600 million yuan (US$82 million) to 800 million yuan, one of the sources said.

The deal comes as China races to build its constellation of very low-Earth orbit (LEO) satellites to catch up with U.S.-based Starlink, a fast-growing network of LEO satellites run by billionaire Elon Musk’s Space X.

Investors expect the move to boost demand in rocket launch services necessary to lift satellites into space, including those provided by private players.

One of the key investors in OrienSpace’s new funraising is linked to the local government of China’s eastern city of Wuxi, said the two sources.

Details of the fundraising have not been finalized, however, and could still change, said one of the sources.

OrienSpace’s first rocket, “Gravity-1”, which relies on solid materials in the engine to give it thrust, is set for a debut launch in December. OrienSpace has two other rockets in its pipeline.

This month, the startup said it signed a pact with the Liangxi district government in Wuxi to build a rocket engine base with annual capacity to turn out 300 rocket engines that require liquid materials.

The proceeds from the new capital raising will be used mainly to support manufacturing related to such rocket engines, said one of the sources.

In May last year, OrienSpace, founded in 2020 and headquartered in the city of Yantai in the eastern China province of Shandong, said it raised 400 million yuan from investors including miHoYo, the maker of the hit game “Genshin Impact”.

It also received early funding from HongShan, previously known as Sequoia China.

Chinese commercial space firms have rushed into the sector since 2014, when the government allowed private investment in the industry. A handful of private startups have successfully launched rockets this year. (SD-Agencies)