Crypto tycoon's space dream: spend $1 billion to build a commercial space station

The low-key billionaire who founded Mt. Gox and Ripple is investing heavily in the world's first commercial space station.

Jed McCaleb has made a fortune in cryptocurrency, and now he's ready to invest a large part of it in his space dream.

The billionaire who founded the notorious Bitcoin exchange Mt. Gox and the cryptocurrency XRP is single-handedly funding an ambitious plan: building the world's first commercial space station and sending it into space.

If successful, his startup Vast Space LLC is expected to win a potentially multibillion-dollar contract from NASA next year to replace the International Space Station. If it fails, McCaleb said he is prepared to lose $1 billion. As of the end of 2023, McCaleb controls billions of dollars in assets through two foundations, all of which come from his personal donations.

This step is crucial if humans are to live beyond Earth in the future. “There aren’t many people willing to commit as much resources, time and risk as I did,” McCaleb, 50, said at the company’s headquarters in Long Beach, California.

He has since hired an industry veteran as CEO, and SpaceX is providing some of its technology to Vast. Meanwhile, Elon Musk has urged the U.S. to accelerate the timetable for retiring the International Space Station, currently scheduled for late 2030. Vast, founded in 2021, uses technology developed by SpaceX for some of its spacecraft, notably a docking adapter for connecting the SpaceX Dragon spacecraft to the Vast space station and a space internet system that provides Wi-Fi to the station via Starlink. Vast has booked SpaceX launch services to get its hardware into orbit and astronauts to the space station, and SpaceX has agreed to transport astronauts for Vast as long as NASA approves it.

Still, the task is daunting, and it’s hard to see from McCaleb’s experience that he’s the man for it. The Arkansas farm boy and UC Berkeley dropout has no background in aerospace. His career has been marked by getting first in emerging technologies and then pivoting before government regulation and other headwinds upend the industry — short-term thinking that seems antithetical to the long-term focus needed to win a high-stakes race to create technological wonders.

At Vast’s Long Beach headquarters, Sam Yagan, a friend of McCaleb’s who co-founded an online file-sharing company more than two decades ago, says the entrepreneur is a thoughtful risk-taker. “He’s very rational about these things,” Yagan says, “but he’s willing to take what you and I would consider big risks, which is a bit of a maverick.”

Many Vast employees have worked at SpaceX. The parking lot at the company’s headquarters is filled with cars made by Musk’s Tesla. One of the Cybertrucks belongs to Max Haot, who joined Vast in 2023 after McCaleb bought his company. Haot has since become Vast’s CEO, having McCaleb (who drives a more modest Model 3) fly in from his home in San Francisco once a week to oversee progress.

Before the acquisition, Haot wasn’t focused on the space station. Instead, he tried to emulate Musk by starting another rocket launch startup, Launcher. The company received $30 million in investment and made progress in developing rocket engines and vehicles, but both satellites built by Launcher suffered failures after entering space. In 2022, Haot met McCaleb while looking for investors.

McCaleb made an acquisition proposal and agreed that Haot would serve as Vast’s president and eventually CEO. Haot was reluctant to accept the deal at first, but changed his mind when he realized that Launcher was having difficulty obtaining the funds it needed.

Vast founder and chairman Jed McCaleb with CEO Max Haot at the test base in Mojave, California, Vast’s grand vision is not just to build the first private space station. The company also hopes to develop an artificial gravity system to simulate Earth's environment for future astronauts. This project is very complicated and requires setting up huge rotating modules in space using centrifugal force. This proposal is attractive because the experience of humans living and working for a long time on the International Space Station shows that long-term exposure to microgravity can damage various biological systems.

However, this is still a long way off. For now, Vast needs to get its first space station into orbit. The company's staff has rapidly increased from less than 200 a year ago to 740, covering a wide range of talents from technical engineers to space suit manufacturers. Vast's headquarters operates 24 hours a day, and engineers and construction crews work in shifts, either expanding the Long Beach facility or building Vast's first prototype space station, Haven-1.

Space stations are a common element in pop culture, such as the Death Star in "Star Wars" and the eponymous space station in "Star Trek: Deep Space Nine". Space stations have also been an important part of American space exploration since astronauts first boarded the experimental Skylab in 1973. Decades later, as the Cold War ended, NASA worked with Russia and other countries to build a larger international space station. Since November 2000, there has always been at least one astronaut on the International Space Station, who often study materials and the behavior of the human body in a microgravity environment.

A technician at Vast headquarters, source: Bloomberg Businessweek

Haven-1 is about 33 feet tall (about 10 meters) and 14.5 feet wide (about 4.4 meters), and is designed to fit tightly into the nose cone of a SpaceX Falcon 9 rocket. The space station has about 1,600 cubic feet (45 cubic meters) of habitable space, about twice the size of an average RV. It will be equipped with private sleeping cabins, a large window, wood paneling and a table for four people.

At least that's its goal. In January, the company began building Haven-1, which is scheduled to launch in May 2026, a delay from the original plan of August this year. The company recently tested a prototype to confirm that its structure can withstand the internal air pressure, and is developing power systems, propulsion units and other key components for manned missions. Its shell must be able to withstand the harsh environment and temperatures of space while maintaining the air pressure and gases that humans are accustomed to on Earth.

We are not a real space station company yet, Haot said. We are an aspiring space station company.

The main structure of Haven-1 is awaiting further testing at Vast's Mojave base. Assuming all goes well, after Haven-1 launches, Vast will send four astronauts into space on a Falcon 9 rocket to dock with the space station. If the first launch is successful, Vast plans to launch the first module of the next space station, Haven-2, by 2028. It will be the starting point for a larger base designed to replace NASA's International Space Station.

One of the biggest challenges will be to create an effective life support system. The International Space Station uses a regeneration system to recycle all wastewater into drinking water and convert carbon dioxide into breathable oxygen. Such a system is necessary if passengers are to stay on the station for long periods of time, but Haven-1 will not have it because astronauts are expected to stay only briefly. Vast plans to eventually equip Haven-2 with such a system, but the station is not expected to be staffed for long periods of time in the first few years.

Rivals including Axiom Space, Blue Origin and Voyager Space Holdings are also racing to build their own space stations, but one advantage Vast has is McCaleb's willingness to invest heavily in the project. Vast is the only company that is primarily self-funded and ready to go, which makes them an interesting choice in that regard, said Chad Anderson, founder and managing partner of Space Capital, an investment firm focused on the space industry. (Anderson has no financial ties to Vast but has invested in SpaceX.)

While these competitors have aerospace backgrounds and some launch contracts, they also don't have such a close partnership with SpaceX.

Engineers work on life-support systems in a clean room at Vast’s headquarters. McCaleb is eager to downplay any personal relationship, saying he’s met Musk “so many times he probably doesn’t even remember me,” even though both have invested in OpenAI. Despite their differences in approach and demeanor, their respective interests and unconventional paths to riches have many similarities: Both dropped out of school (Musk later), started software businesses in emerging fields, and parlayed their love of fantasy and gaming into financial success.

McCaleb’s first project, eDonkey, was one of the first file-sharing services on the internet, an early competitor to Napster. Founded in 2000, the company allowed users to share music and movies for free, bringing in millions of dollars a year from advertising. It closed in 2006 after agreeing to pay $30 million to the Recording Industry Association of America to avoid a copyright infringement lawsuit.

McCaleb’s next success was Mt. Gox, one of the world’s first bitcoin exchanges. The site was founded by McCaleb in 2010, and a year later he sold a majority stake for an undisclosed price. In February 2014, the exchange went bankrupt, and users lost more than $400 million worth of Bitcoin at the time, the largest crypto disaster in history before FTX collapsed in 2023. Although McCaleb remained a minority shareholder, he was not sanctioned and said he also suffered losses in the disaster.

By then, McCaleb had already started his next project: XRP, the cryptocurrency on the Ripple protocol, which he also co-founded. McCaleb initially owned 9% of XRP. He left the company in 2013 after a disagreement with his co-founders, but kept his XRP and gradually sold it over the next few years. During the cryptocurrency boom in late 2017, XRP's value soared, eventually swelling to a market value of $130 billion in January 2018, according to analysis by XRPScan. McCaleb netted about $3.2 billion from selling XRP and Ripple stakes between 2014 and 2022.

He is one of the 10 most important founders in the cryptocurrency space, though few people really know him. “What’s interesting is that most of the other important people are flamboyant, high-profile, and extravagant,” said Nic Carter, founding partner of Castle Island Ventures, an investment firm focused on public blockchains.

Despite his huge success, McCaleb has a small social circle and mainly works with Yagan and other longtime partners. He has a house in Costa Rica, a surfing hotspot, a residence in Berkeley, and his own private jet.

McCaleb provides a steady source of investment in the often volatile field of the aerospace industry, where once-promising startups often fail due to lack of funds. Although a former employee filed a lawsuit alleging that Vast tried to cut corners, the company does not seem to have the negative news that SpaceX has. Its billionaire CEO spends most of his time at home with his wife and three children, not trying to fight the federal government.

Haven-1 at Vast's test facility If McCaleb's plan pans out, Vast has booked multiple crewed missions with SpaceX to send astronauts into orbit, and both McCaleb and Haot say they'd love to take those flights themselves. "As a kid, I spent a lot of time outdoors exploring, looking up at the sky and marveling at how amazing it is," McCaleb said. But it all depends first on whether the company can win a final contract for a NASA program to launch a commercial space station that could replace the International Space Station. The program comes with a soft guarantee that NASA will buy time and space on any space station that reaches orbit. The contract is expected to be signed by mid-2026.

Without a NASA contract, the commercial viability of any space station is questionable, Haot said. Winning this competition is a matter of survival.