Lunacore Systems - WFW VC Teardown #05

Deep Tech · Seed · Space Infrastructure · Cryogenic Energy Storage · Evaluated by Ashwath Sundaresan Long Arc Advisory / formerly Pacific Channel

Verdict

What Lunacore Systems Does

Lunacore Systems is building cryogenic energy storage modules for long-duration lunar and orbital missions - using a phase-change material platform called PCX™ that is designed to operate across -180°C to +120°C without the thermal degradation that limits current lithium-based batteries.

Think: a power storage system that doesn't give up when a satellite crosses from full sun into eclipse and back again - which is exactly when today's batteries start dying early and adding mass through redundancy.

Raising: $5M USD seed · Founder: Dr. Noah Armitage

Interested in learning more about Lunacore Systems?

Lunacore Systems Intro Email

3 Things That Could Kill This

1. Nobody knows what the product is - and that's a serious problem

After reading the intro email and the full pitch, it is still not possible to clearly answer whether PCX™ is a material, a component, a subsystem, or a flight-ready module. That is not a pedantic distinction. If Lunacore is selling a material, the revenue model looks like a materials supplier: low per-unit value, long qualification cycles, high dependency on the integrator's roadmap. If it's selling a qualified subsystem, the value capture is much higher - but so is the qualification burden, the capital requirement, and the timeline to first revenue. The pitch uses language from both worlds simultaneously, which makes it impossible to assess the business model, the margin structure, or what "customer" even means here.

Why this matters: In deep tech hardware, the product definition is not a detail you refine later. It determines who your customer is, how long the sales cycle takes, how much capital you need before first revenue, and what "de-risked" looks like. Getting this wrong - or leaving it open - costs years.

2. LOIs in space are not traction

Three non-binding LOIs contingent on successful in-orbit demonstration reads, in this sector, as three organisations willing to stay in conversation. That is useful context. It is not evidence of demand. In aerospace, LOIs are a standard courtesy extended to early-stage teams with plausible technology. They rarely convert into contracts unless tied to a funded mission, an active engineering integration program, or a paid feasibility study. None of those are present here.

The pitch has no paid engagements, no government grant funding confirmed, and no active integration work underway. That means the customer discovery section is describing structured conversations, not a sales pipeline.

Why this matters: Commercialisation in space hardware depends on qualification, integration, and flight heritage - in that order. LOIs don't de-risk any of those three. A single paid technical evaluation contract would be worth more than all three LOIs combined.

3. The qualification pathway is invisible

The pitch describes where Lunacore has been - lab-scale thermal vacuum testing, repeated cycling, three patents filed - but says almost nothing about what happens next, in what order, and on what timeline. "Complete in-orbit demonstration" is the stated use of the $5M raise, but there is no TRL progression roadmap, no ground qualification schedule, no integration partner named, and no mission identified.

In space hardware, investors are not funding the technology. They are funding the journey from current TRL to a commercially integrable, flight-qualified system. That map needs to be explicit. Capital that funds continued materials optimisation without a defined qualification gate extends technical risk rather than reducing it.

Why this matters: The question is not "is this technology real?" The question is "does this team know exactly what needs to happen, in what order, to get from where they are to a paying customer - and does $5M get them there?" Right now, that question has no answer in the pitch.

Why This Might Actually Work

1. The problem is real and getting more urgent

Lithium battery degradation under extreme thermal cycling is a genuine constraint - and may become a more acute problem as lunar programs move from short demonstrations to sustained operations. Long-duration lunar robotics, orbital servicing vehicles, and defense-adjacent platforms all share the same pain. This is not an invented market problem.

2. The team has genuinely relevant credentials

A PhD in cryogenics from an Airbus Space Systems background, an ex-NASA JPL energy systems lead, and an ex-Rocket Lab operations person is a credible founding team for this specific problem. Airbus Space and JPL are exactly the environments where cryogenic thermal systems get developed and qualified. The Rocket Lab operations background suggests someone who has seen hardware move from development to launch. That combination is not common.

3. Phase-change cryogenic storage is a legitimate technical direction

The PCX™ approach - using phase-change material to buffer thermal extremes and store energy - is a real engineering pathway for this problem. It is not novel at the physics level, but novel application of known materials science into a space-qualified form factor is exactly how many deep tech hardware companies find their edge. Three patents covering materials and system architecture suggests the team has identified something specific enough to protect.

4. The market timing is genuinely improving

The lunar economy is not hypothetical anymore. NASA's Artemis program, ESA's lunar surface ambitions, and a growing number of commercial lunar logistics providers are creating real procurement pipelines for enabling subsystems. Defense-adjacent orbital programs are similarly expanding. A cryogenic power module that solves thermal cycling constraints could be a meaningful enabling technology across multiple program types simultaneously.

What the Founder Should Do Next

Before the next investor conversation, Noah needs to answer three questions the current pitch leaves open. Everything else is secondary.

• Define the product in one sentence, then commit to it - Is PCX™ a material you licence, a component you sell per unit, or a qualified subsystem you integrate? Pick one. Build the pitch, the business model, and the financial projections around that definition. A pitch that reads across all three categories convinces nobody. The answer also determines whether the customer is a procurement officer at a prime, a mission architect, or a payload integrator - and those are completely different conversations.
• Lead with hard data, not capability language - The next pitch should open with a specific number: energy density in Wh/kg, number of completed thermal vacuum cycles, degradation percentage after X cycles, and system-level mass saving versus the Li-ion plus heater baseline it replaces. If that data exists - and it should, given lab validation is described as complete - lead with it. That single table changes the credibility of everything that follows.
• Replace LOIs with real engagement evidence - Even one paid technical evaluation contract or one named integration discussion tied to a funded mission changes the traction story completely. The next raise should be built around achieving that milestone first, or the LOIs need to be presented much more carefully - with the named organisation type, the program it connects to, and what would trigger conversion.
• Map the qualification roadmap explicitly - TRL today, TRL at end of raise, ground qualification schedule, in-orbit demonstration vehicle, and earliest possible commercial contract date. That roadmap needs to be in the pitch. Without it, $5M looks like it buys more time in the lab, not a meaningful step toward a paying customer.
• Acknowledge the competition honestly - Competitors exist. Presenting a blank competition slide in a sector with real incumbents raises an immediate credibility question: does the team not know who is in the market, or are they choosing not to engage? Either reading is bad.

What This Teardown Teaches

Pattern 1 - In deep tech hardware, product clarity is not optional

The most common mistake technical founders make is describing a technology instead of a product. A technology is a capability. A product is a thing a specific customer buys, at a specific price, at a specific point in the qualification process, for a specific reason. Lunacore has described a technology. Until the pitch defines the product - including what form it takes, who signs the purchase order, and what that person cares about - investors cannot construct the business case needed to fund it.

Pattern 2 - Traction in deep tech hardware looks different from SaaS, and founders have to say so clearly

A founder raising a deep tech hardware seed round cannot show MRR. That is understood. But the absence of revenue has to be replaced with something that demonstrates equivalent commercial intent and technical de-risking: government grant funding secured, a paid feasibility study, a named prime running an active integration program, or a specific mission the technology is being evaluated for. LOIs do not fill that role. The pitch needs to make a deliberate case for why its version of traction is meaningful - not assume investors will interpret it generously.

Pattern 3 - Capital raises in deep tech must map precisely to milestone gates, not time periods

"$5M to complete in-orbit demonstration" is not a raise rationale. It is a budget line. What investors need to see is the specific TRL gate this capital unlocks, what changes about the company's risk profile when that gate is passed, and why $5M is the right amount - not $3M, not $8M. The milestone gate and the capital amount need to be explicitly connected. When they are not, investors cannot assess whether the raise is appropriately sized, and they cannot construct the follow-on thesis that justifies writing the cheque now.

30-Minute Meeting?

Maybe - conditional on three things being answered before the call

The technology direction is credible, the team credentials are real, and the market timing is improving. But Ash would not take this meeting without first understanding whether hard performance data exists, whether the qualification roadmap is specific and realistic, and whether any customer engagement has moved beyond a non-binding LOI.

If Noah can send thermal vacuum test data, a TRL progression chart, and a one-page explanation of the product definition before the meeting, that conversation becomes significantly more useful for both sides. Without that, thirty minutes would be spent on questions the pitch should have already answered.

Space hardware is one of the hardest commercial journeys in deep tech. The teams that succeed are the ones who are brutally precise about where they are, what needs to happen next, and what validated evidence they have.

Full VC Notes

Ashwath Sundaresan

Connect with Ash on LinkedIn

Previously Partner at Pacific Channel, New Zealand's specialist deep tech venture capital firm, and now investing independently via Long Arc Advisory. Ashwath has backed and governed deep tech companies across clean tech, advanced engineering, and the future of the environment - including Tectonus, Vortex Power Systems, Cetogenix, and TasmanIon.

Quality is okay but not compelling enough. It doesn't clearly articulate:

• What the actual product is
• Who the customer is
• What hard performance metric has been achieved
• Why this matters now

It feels conceptual rather than commercially grounded. For something as technical and capital-intensive as space hardware, the intro needs at least one hard data point (energy density, thermal cycle durability, mass savings vs Li-ion, etc.). Right now, it reads like early-stage materials R&D rather than an investable system.

The problem - directionally right but not tightly framed.

Space systems do face:

• Extreme thermal cycling
• Energy constraints
• Mass constraints
• Complex thermal management

But the pitch doesn't clearly define which specific pain point they are solving. Is this:

• Reducing battery mass?
• Improving survivability?
• Replacing resistive heaters?
• Thermal smoothing for high-power payloads?

Without a precise problem definition, it's hard to assess whether this is mission-critical or incremental.

Not sure what the product is…tech is phase change material…is the product a component or a full solution? Is it a battery or thermal mgmt solution? Temp range seems extreme - is this even needed in space where it's -50C?

This is the biggest clarity gap. I am not clear whether:

• This is a material
• A component
• A subsystem
• A full flight-ready module
• A thermal battery
• Or a broader thermal management solution

That matters enormously.

If it's a material then I would expect lower revenue potential, long integration cycles. If it's a subsystem, then this is higher value capture but higher qualification burden (e.g. testing, in-space qualification etc).

On the temperature question, space is not uniformly cold. Surfaces exposed to sun can exceed +120°C and drop below -100°C in shadow depending on orbit and configuration. So extreme thermal ranges are real.

However, the burden is on them to prove:

• Measured energy density (Wh/kg equivalent)
• Thermal cycling durability
• System-level mass savings vs Li-ion batteries + heaters
• Reliability under vacuum and radiation

Without quantified performance data, this is theoretical.

I am not convinced by 3 non-binding LOIs. In space, LOIs are common and rarely convert unless tied to:

• Funded missions
• Engineering integration work
• Paid feasibility studies
• Government-backed programs

Commercialisation depends on qualification, integration and flight heritage. I would want to see:

• Thermal vacuum chamber testing
• Government grant funding to date
• Paid technical evaluation contracts
• Active system integration discussions

Without that, this is early signal, not traction.

The market sizing feels generic. "Space is growing" is not sufficient. What I would want:

• TAM for space-based thermal energy storage systems
• Number of satellites requiring eclipse storage enhancement
• Defense applications + clearer definition of use cases
• Average subsystem cost per satellite / unit economics (i.e. how big a problem is thermal mgmt vs all the other things that make up the whole system and is this a big enough cost?)

At the moment, I don't see a credible addressable market. If they are only selling a material, TAM likely compresses materially. Currently, market framing lacks precision.

For space hardware, I am interested in execution capability. I would assess:

• Has anyone taken hardware from lab to flight?
• Do they have space qualification experience?
• Is there someone who understands aerospace procurement?
• Do they have relationships with primes or defense?

If the team is materials-science-heavy but light on flight experience and BD, execution risk is high.

7. Overall

Primary reason I'd pass:

• No hard performance data shared (energy density, cycle life, degradation)
• Unclear product definition (material vs subsystem)
• LOIs not meaningful evidence of demand
• No clear qualification roadmap
• Competitive differentiation not quantified

Without validated performance metrics and a credible qualification pathway, this is high-risk materials R&D.

Primary reason I'd lean in:

• Demonstrated 2-3x system-level energy density improvement
• Measured thermal vacuum test data
• Credible prime actively integrating into a funded mission
• Clear TRL progression roadmap
• First flight demo scheduled

In space hardware, validated performance + integration signal changes the risk profile materially.

8. 30-Minute Meeting?

Maybe - would want to understand:

• Whether hard technical data exists
• Whether a credible qualification roadmap exists
• Whether customer engagement is real or exploratory

Quick Navigation:

Back to VC Teardowns | How NZ VCs Evaluate Startups

🚨 Disclaimers: All startup companies, business models, products and founders described in VC Teardowns are fictional and created solely for educational purposes. Any resemblance to actual companies, persons or events — past, present or future — is purely coincidental. The opinion of each participating VC reflects their individual perspective and does not represent their firm as a whole. A teardown should not be treated as a universal rulebook. Founders are encouraged to engage investors early and build relationships — early conversations are often exploratory, not evaluative.