Space Business: Failure to Launch

What will happen to the small rocket companies?

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Welcome to Quartz’s newsletter on the economic possibilities of the extraterrestrial sphere. Please forward widely, and let me know what you think.

This week: How to exit a launch vehicle company, SpaceX heads back to the ISS, and Europe’s new mega constellation.

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The next new small launch vehicle is stepping up to the pad: Relativity Space says it has a license to debut its Terran 1 rocket at Cape Canaveral on March 8.

If Relativity, built on the back of novel 3D printing tech, puts its first rocket in orbit, it will be an outlier after a difficult year for launch vehicle start-ups.

In January, ABL Space Systems’ rocket got 700 ft off the ground before it fell back down and exploded, while Virgin Orbit (NASDAQ:VORB) saw a launch attempt fail during the same month that cast the company’s financial future in doubt. In October, Firefly managed to get its rocket into orbit, but one that was too low, so the satellites it launched quickly fell back to Earth. After a series of failures in 2022, Astra (NASDAQ: ASTR) has had to pivot to a new vehicle design.

Indeed, of the dozens of attempts to start viable small launch companies in the wake of the SpaceX success in the previous decade, just one Western firm—Rocket Lab—is regularly putting satellites on orbit. (Two Chinese start-ups have launched satellites, though they use simpler and less efficient solid-fuel rockets.)

All of these companies exist in the shadow of SpaceX. While Elon Musk’s launch business is focused on larger spacecraft, it also operates rideshares several times a year for more than 100 small satellites to fly into space at once. That’s a cheaper option for satellite companies, at least by the kilogram, than Rocket Lab’s Electron vehicle. There are other considerations, though, like timing, flexibility and orbital destinations, that give dedicated small rocket firms an advantage. But then there’s the prospect of SpaceX’s huge Starship coming into service, along with the proliferation of orbital transfer vehicles or space tugs that let satellite operators strike a balance between the efficiency of a rideshare and ability to target a specific orbit.

That leaves the launch market facing a strange paradox: Technical challenges and robust competition have made it difficult for new rocket builders to gain traction and raise funding, leading to predictions of a brutal rocket-maker winnowing. Meanwhile, satellite operators say they want more and better options to put hardware on orbit.

“We work with all the companies that have shown that they can reliably put stuff into space, unfortunately there aren’t that many of them—SpaceX and Rocket Lab,” Payam Banazadeh, the CEO of the space radar company Capella, told Quartz in January. “I wish that there were more.”

Meanwhile, with investment capital for these companies drying up, they may struggle to find acquirers. Unlike other space businesses with assets on orbit or unique tech, a struggling rocket company doesn’t offer much benefit to a suitor.

“The problem is there’s no asset value there—other than the machine tools and the building, all the IP is basically trash. If you made the wrong bet in a launcher company, you should expect zero back,” says Chris Quilty, a space business consultant.

One counter example is Launcher, a rocket start-up founded in 2017 by the French entrepreneur Max Haot. The company has developed what it says is the highest performance kerosene turbopump built in the US, a critical component for a rocket engine. While seeking new investment for the company last summer, Haot met Jed McCaleb, a crypto billionaire who started a firm called Vast to develop a commercial space station. Ultimately, McCaleb decided to acquire Launcher, completing the deal last week and installing Haot as the firm’s new president.

As part of the deal, the company is giving up the rocket it planned to build. But Haot hasn’t given up on the business model: “Our view and conviction on small launch has not changed, the narrative that there are too many [companies] is wildly incorrect.” The problem, per Haot, is that SpaceX-inspired in-house engine development programs aren’t producing powerful enough rockets. Vast will continue developing Launcher’s engine with an eye toward selling it to other rocket-makers.

Vast will gain a team of engineers who have experience with space hardware. Launcher has also developed an orbital transfer vehicle, which first launched in January but failed when a malfunctioning navigation system couldn’t point its solar panels at the Sun. The company has two more OTV launches planned for this year. The logic, though, is that building functional spacecraft is a good stepping stone toward a station, and the OTV will be a useful testbed for future station components. Vast still hasn’t revealed its plans or timing for its space station.

In the meantime, other rocket makers may not find as soft of a landing. Some, like Firefly and ABL, have champions to protect them, in the respective forms of private equity fund AE Industrial Partners and defense conglomerate Lockheed Martin. Others whose hopes rest on volatile public markets and increasingly cautious venture capitalists will have to figure out a profitable pivot—or join the ranks of rockets that never quite were.



I stopped by Relativity’s Cape Canaveral launch site late last summer to see how things were progressing toward the first launch of the Terran 1, which if it goes off on time will be the first orbital vehicle powered by methane fuel. Here’s a view of the launch pad with a piece of test hardware on top, taken from the trench where many gallons of water will be dumped during launch to dampen vibrations and prevent fires.

Relativity Space's Cape Canaveral launch pad.
Photo: Tim Fernholz


Terran Orbital wins $2.4 billion contract. The satellite company (NYSE:LLAP) has been hired by Rivada Space Networks to build 300 satellites for a proposed constellation, though details on how much money Rivada has on hand remain scarce. Rivada was founded in 2004 and has cycled through several telecom business models, including a controversial 5G plan during the Trump administration, before landing on satellites last year.

SpaceX’s Crew-6 aims for Feb. 27. The latest crewed mission to the International Space Station is now expected to launch on Monday. Passengers include two NASA astronauts, the second ever astronaut from the UAE, and a Russian cosmonaut. It’s the ninth mission SpaceX has flown with human passengers since 2020.

Another leaky Russian spacecraft. This time, a Progress cargo vehicle sent to the International Space Station by Russia has developed a leak in its coolant system. This problem doesn’t threaten astronauts, but the circumstances—Russia is blaming orbital debris—certainly raises some questions.

Here come the national megaconstellations. Last week, the EU Parliament voted to approve the creation of a new satellite network known as IRISS, while China is moving forward with its own global constellation. These projects will put pressure on Starlink, OneWeb and other nascent low Earth orbit satellite projects that depend on a global customer base, while raising new questions about regulation and competition policy.

Japan aborts debut rocket launch. The new rocket developed by Japan’s space agency and Mitsubishi canceled its first launch at the last second on Feb. 17 after an automated system detected some kind of error. Thus far, no additional information has been released.

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This was issue 169 of our newsletter. Hope your week is out of this world! Please send me your nominees for most underrated small rocket maker, your favorite debut launch traditions, tips, and informed opinions to