US Government Asks Max Polyakov to Sell Firefly Shares for Safety Concerns

The US authorities have recently asked Max Polyakov, an established Ukrainian entrepreneur, to sell shares of his US-based company Firefly Aerospace for national safety concerns.

Max Polyakov built his fortune by developing software in Ukraine and has spent several years investing in Firefly Aerospace, a rocket maker from Austin, Texas. The main reason why US authorities insist Polyakov sell his shares is their concerns that sensible aerospace technology will make way to Russia and other non-allied countries making rockets. Even though Maxim Polyakov has previously invested over $200 million into the venture, he agreed to the US authorities’ request and stepped down from the company board of directors in 2020. Dr. Max Polyakov’s resignation from Firefly Aerospace’s daily activities helped the company secure a lot of lucrative contracts from the US government and military.

However, resignation from the board of directors was not enough to alleviate the tension, and Maxym Polyakov was later asked to sell roughly half of his shares by the US Committee on Foreign Investment (CFIUS). Maxim Polyakov agreed to this, too, while at the same time retaining his ownership of Firefly, sponsored by Polyakov’s investment fund Noosphere Ventures. According to the latter’s official statement, Max Polyakov’s ownership of Firefly Aerospace poses no security threat to the US, especially considering that Dr. Max Polyakov stepped down from Firefly day-to-day operations. However, Noosphere Ventures is willing to hire an investment banking firm to assist with selling Firefly interest.

With a doctor’s degree in economics, Max Polyakov built up wealth developing a variety of software products, from gaming and retail sites to dating platforms. In 2017, when Firefly was on the verge of bankruptcy, Dr. Polyakov influxed hundreds of thousands of dollars to keep the aerospace company afloat. Rebranded as Firefly Aerospace, the company made its first Alpha rocket launch last September. Even though the rocket never reached its required orbit, the company team received enough test data to prepare for the second launch, which should be more successful.

Firefly Progress Under Dr. Max Polyakov Leadership

Firefly Aerospace has been making steady progress in the last couple of years, securing contracts from NASA, US Air Force, and the Defense Advanced Research Projects Agency. The company has also obtained a technology-sharing agreement between the US and Ukraine. Currently, Firefly relies on its technology R&D center in Ukraine and has a fully-functioning manufacturing facility in the States, in Central Texas.

The reason why US authorities are concerned about leaking sensitive rocket-building data to Russia is the latter’s escalated conflict with Ukraine, which remains a US ally. As Russia builds up forces on the Ukrainian border, the US is concerned about the upcoming invasion and a potential loss of sensitive data.

Half a year after stepping down from Firefly’s board of directors in November 2020, Max Polyakov sold a large portion of his shares in Firefly. The deal that raised the company $75 million validated another $1 billion. Thanks to these moves and the appointment of former government officials to the new board of directors, Firefly has secured several lucrative government contracts. Today, all major decisions as to Firefly operations are taken by Tom Markusic, the company’s original founder and present-day CEO. Before establishing Firefly, Markusic worked with Elon Musk at Space Exploration Technologies Corp and NASA.

The recently issued Noosphere Ventures statement specifies that The US authorities carefully vetted Maxim Polyakov and his companies and that no security threat has been identified in this process. However, escalating tension between Russia and Ukraine makes CFIUS’s actions well-justified and clearly understandable. To this day, Noosphere Ventures is working to address any new concerns on the subject as they arise.

Just like Elon Musk and Jeff Bezos, Maxim Polyakov staked huge portions of his previously accumulated wealth to commercialize space. However, all three private space pioneers have a focus of their own. Maxym Polyakov is betting on a middle-class rocket Alpha that can carry dozens of satellites in a single launch. Besides that, Firefly is planning to build a lunar lander and a spaceplane.

Even though Polyakov was not born in the states, he and his family permanently reside in Silicon Valley. Polyakov himself explains his considerable investment in Firefly Aerospace as an act of patriotism for the US. On several occasions, he has voiced concerns that unless rocket technology in the US is sufficiently funded, it may find its way to US enemies — particularly Iran and North Korea.

SpaceX and Firefly Aerospace Collaboration

Firefly Aerospace Inc. and SpaceX representatives announced a joint contract on May 20, 2021, that would facilitate the launch of Firefly’s Blue Ghost lunar lander on Falcon 9. The contract was awarded to SpaceX after a lengthy review of possible candidates. Shea Ferring, Firefly Senior VP of Spacecraft, has said that Firefly spent a lot of time selecting possible candidates for the mission; SpaceX’s Falcon 9 had seemed the obvious choice. According to Mr. Ferring, with the help of Blue Ghost propulsion, Falcon 9 can transfer up to 150 kg of cargo to the Moon’s surface.

The Blue Ghost lunar lander will be carrying over ten payloads for NASA’s payload mission. Blue Ghost will have the task of landing on the Moon in the Mare Crisium basin, where it will operate on-board payloads via lunar transit. In addition to the scheduled NASA payloads, Blue Ghost will also be contracted to fulfill several other commercial payloads, not disclosed at this time.

Tom Markusic, CEO at Firefly, said recently that the lunar vehicle team is working hard to ensure that the launch and transit operations will go without a hitch. Blue Ghost will have to navigate the lunar surface for a complete lunar day, which lasts roughly 14 Earth days, as well as during lunar orbit. Mr. Markusic has assured reporters that the Maxym Polyakov team is taking full advantage of SpaceX’s Falcon 9’s capabilities to ensure a successful mission.