Sierra Space raises nearly $300 million from Japanese consortium at over $5 billion valuation

• Sierra Space raised nearly $300 million in new funds in a round led by a trio of Japanese investors.
• The round values the space company at $5.3 billion, the company confirmed on Tuesday.
• The fresh funds come as Sierra Space focuses on getting its Dream Chaser spaceplane flying.

Artist's rendering of Sierra Space's Dream Chaser spaceplane in this undated handout obtained March 25, 2022.

Sierra Space | via Reuters

Sierra Space, the subsidiary of private aerospace contractor Sierra Nevada Corporation, raised new funds at a $5.3 billion valuation, the company announced on Tuesday.

Sierra Space's equity raise of $290 million was led by Japanese investors MUFG, Kanematsu and Tokio Marine, with significant participation from prior investors and insiders. Citigroup advised on the deal.

"Sierra Space is excited to create a long-term strategic relationship with our Japanese investors and industry partners," CEO Tom Vice said in a statement.

CNBC previously reported the fundraise.

MUFG is the largest bank in Japan, and Sierra noted the trio of investors are already working with the country's space agency to study the market opportunity in low Earth orbit – where the International Space Station operates currently.

"MUFG has decided to invest in Low Earth Orbit to support commercialization, the creation of new industries, and the resolution of social issues," MUFG Bank President and CEO Junichi Hanzawa said in a statement.

Two years ago, Sierra Space raised $1.4 billion at a $4.5 billion valuation from investors including General Atlantic, BlackRock, AE Industrial Partners, Coatue and Moore Strategic Ventures.

The fresh funds come as Sierra Space focuses on getting its Dream Chaser spaceplane flying.

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Dream Chaser has been in development for years with a goal to deliver cargo and eventually crew to low Earth orbit as a reusable vehicle. It resembles a miniaturized NASA Space Shuttle in appearance and is built to launch atop a traditional rocket and land on a runway like an airplane.

The first Dream Chaser launch was previously scheduled for late last year, but delays in the development of United Launch Alliance's Vulcan rocket pushed back that timeline. Dream Chaser is planned to launch on ULA's second Vulcan mission, with the first Vulcan launch targeting the fourth quarter of this year.

Sierra Space is also one of several companies working on a private space station. It plans to launch a "pathfinder" demonstration mission of its LIFE (Large Integrated Flexible Environment) habitat in 2026.