A troubled SPAC plans to buy iRocket for $400M but it already returned most of its cash
An ambitious and unproven small launch startup, Innovative Rocket Technologies Inc. (iRocket), is set to go public through a $400 million merger with BPGC Acquisition Corp., a special purpose acquisition company (SPAC) founded by former Commerce Secretary Wilbur Ross. The audacious deal, which aims to close in the fourth quarter of this year, raises significant questions given the SPAC’s severely depleted cash reserves.
BPGC Acquisition Corp. initiated its journey with an impressive $345 million raised in its March 2021 IPO. However, the SPAC has since returned the vast majority of its capital to shareholders. A September 2024 filing with the U.S. Securities and Exchange Commission (SEC) revealed that the trust held just $30.5 million after failing to identify an acquisition target by its initial deadline. A mere 16 days later, an 8-K filing indicated a further $28.8 million in redemptions, leaving the trust with a paltry $1.6 million – representing just 0.5% of its original IPO amount. Despite this drastic depletion, the remaining shareholders, primarily the SPAC’s sponsors, agreed to extend the acquisition deadline to March 2026.
iRocket, founded in 2018 and headquartered in New York, was once a notable name, backed by venture capital firm Village Global, whose limited partners include prominent figures like Bill Gates, Eric Schmidt, and Reid Hoffman. Yet, despite its high-profile backing, iRocket has reportedly raised only a few million dollars in venture funding, a meager sum for the capital-intensive space industry. Critically, the company has yet to conduct a single test flight of its Shockwave launch vehicle. This places it behind competitors such as Stoke Space and Firefly, which are better capitalized and have made more substantial progress in hardware development.
The market for small-to-medium payload launches has also become increasingly crowded. While iRocket’s Shockwave is designed to carry payloads from 300 kg to 1,500 kg, this segment is already serviced by operational vehicles like Firefly’s Alpha and Rocket Lab’s Electron. iRocket’s competitive edge would hinge on proving out its ambitious value proposition: full reusability, rapid refurbishment, and 24-hour responsiveness – a challenging set of goals for any aerospace firm, let alone one with no test flights under its belt. The startup’s LinkedIn profile lists only four employees, excluding board members, underscoring its lean operation. Nonetheless, iRocket does hold significant contracts, including an $18 million deal with the Air Force Research Lab and a $1.8 million contract with the Space Force. A PR firm representing both iRocket and the SPAC declined to comment on the matter.
The SPAC itself has a history of failed ventures. Previously known as Ross Acquisition Corp II (RAC II), it attempted to take biopharma company Aprinoia Therapeutics public in January 2023, only to terminate the deal eight months later. Following this failure, the NYSE initiated delisting proceedings against RAC II last March. The SPAC subsequently changed its name to BPGC Acquisition Corp. and now faces a new deadline of March 2026 to complete an acquisition.
Given BPGC Acquisition Corp.’s minimal cash reserves, the successful execution of the $400 million deal will likely depend on securing a substantial Private Investment in Public Equity (PIPE) round. This influx of capital from private investors would be crucial to ensure iRocket’s existing shareholders receive cash for their equity and to provide the startup with the necessary funding to advance its ambitious rocket development and operational goals.
