Axiom Space has raised $350 million in a funding round led by Saudi Arabia's Aljazira Capital and Korean healthcare firm Boryung as the startup works with NASA to develop a private space station.

The company declined to disclose its valuation on Monday. Axiom said the round took its total raise so far to $505 million and made it the space startup to receive the second-most funding in 2023, only behind Elon Musk's SpaceX.

The move comes at a time when hopes have risen of a thaw in the funding winter for space startups, after investments in the sector stayed flat in the second quarter after more than halving in the first three months of the year.

Axiom, which also has a $1.26 billion contract with the U.S. space agency NASA to develop spacesuits for use on the moon and other space programs, expects the first module of its private space station to launch by 2026.

The company has also trained astronauts taken by SpaceX rockets to the International Space Station (ISS) as the once government-dominated space industry in the United States becomes increasingly privatized. It said it has achieved more than $2.2 billion in customer contracts.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber)