Ukrainian Businessman Who Rescued Rocket Startup 'Firefly' to Sell His Stake in Firm on US' Demand

The businessman revitalised the space company using his own funds back in 2017, when it was on the brink of bankruptcy. Since then, the firm secured its first contracts with the US government and held a partially successful first launch of a satellite.

The US government demanded Ukrainian software mogul Max Polyakov to sell his entire stake in the space company Firefly Aerospace, which manufactures lunar landers and is working on a satellite delivery rocket of its own, under the pretext of national security concerns, Bloomberg has reported citing the businessman's spokespeople. The government also ordered Firefly to halt preparations for its second test launch of their rocket from Vandenberg until the businessman rescinds his ownership, the media outlet reported citing two anonymous sources.

An announcement surprising no one: Firefly Aerospace will take over a launch site at Cape Canaveral Air Force Station and build a new manufacturing facility nearby. It’s a significant step for a company that was on the verge of collapse a few years ago. https://t.co/HZWBK691Jj pic.twitter.com/EuQYgUUx3f

— Loren Grush (@lorengrush) February 22, 2019

Polyakov owns around 50% stake in the company, which he rescued after bankruptcy in 2017 using $200 million from his fortune. He already faced concerns from the US government in terms of his ownership of the company – American laws strictly regulate the handling of rocket technologies, namely prohibiting non-US citizens to work with them. This created many hurdles for Firefly when it was fighting for government contracts, leading to Polyakov's decision to step down from the company’s board to alleviate Washington's concerns.

Did anyone else know about this from firefly aerospace?? pic.twitter.com/xHLgAKruw6

— Starship Lunar HLS (@StarshipLunar) July 19, 2021

However, in November, the US Committee on Foreign Investment sent a letter to the businessmen in which it cited national security worries and demanded that Polyakov sell his stake in Firefly, Bloomberg said. The Ukrainian businessman's spokespeople confirmed to the media outlet that he agreed to fulfil the demand, while stressing that his ownership of the company never posed any national security threats to the US.

"Noosphere Ventures announced today that it intends to retain an investment banking firm to assist in the sale of Noosphere Ventures’ ownership interest in Firefly Aerospace", Polyakov's spokespeople said in a statement.

Polyakov originally bought Firefly, an unsuccessful space startup founded in 2014, with the intent of building a private space company, which would develop its own rocket using combined experience in this field of both American and Ukrainian specialists.

The company founded a research centre in a Ukrainian city. The businessman envisaged that once it's up and running, Firefly would boost both the US and Ukraine's space capabilities. The space startup even acquired a technology sharing agreement between Ukraine and the US, as well as secured several contracts with NASA, DARPA and the US Air Force.

In September 2021, it conducted the first launch of its rocket. While it did not reach the designated orbit, the test run was viewed as a success. Firefly was actively preparing for the second launch when the letter from the US Committee on Foreign Investment arrived.