Investing in Space: Rockets are only the beginning

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An Electron rocket launches from New Zealand on Aug. 4, 2022.

Rocket Lab

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Overview: Rockets are only the beginning

Five U.S. rocket builders have successfully reached orbit in the past two decades. But the CEOs of these companies will tell you that tapping into the global launch market isn’t enough.

“Launch is the keys to space … but once you have the keys to space, then you need to drive the car,” Rocket Lab CEO Peter Beck told CNBC. “The big space companies of the future are not just a launch company on its own or a spacecraft manufacturer on its own. It’s a combined entity where you provide an end-to-end service.”

Breaking into the launch market may seem hard (and expensive) enough on its own. Yet all five companies are moving up and down the value chain into everything from building spacecraft and components, to satellite services, delivery vehicles, lunar landers and more.

Rocket Lab, for its part, has expanded beyond its Electron rockets into making satellite buses, space-quality solar panels, and other spacecraft components. Beck emphasized that Rocket Lab’s investments focus on “all the pain points of how you build infrastructure in orbit.” 

Citing industry studies, Beck also said it’s “pretty obvious” where the total addressable market is most appealing between launch, satellites and space-based services: While the former two reach roughly $15 billion and $30 billion, respectively, the market for space applications is estimated to be upwards of $300 billion.

SpaceX has its satellites manufacturing and internet business, Starlink. Elon Musk has said the company’s launch business likely peaks at about $3 billion a year, but its capital-intensive pursuit to build Starlink is seen as tapping a market that would be 10 times that, or more.

Virgin Orbit is similarly developing a satellite business, which CEO Dan Hart told CNBC he hopes can “unlock” space-based services. 

For Astra, which put its launch business on hold to develop a bigger vehicle, a side business in propulsion offers “one of those rare products where we can scale production to meet the needs of a vast number of customers,” according to CEO Chris Kemp. 

And Firefly, the newest entrant to the launch business, has begun building lunar landers and space utility vehicles, also known as “tugs,” as a sort of last-mile delivery service for satellites. Firefly CEO Bill Weber said his strategy centers around the idea that whichever company “controls propulsion and supply chain is going to win this battle in launch.”

What’s up

  • Boeing takes $195 million charge on delayed Starliner program: The hit was part of a $2.8 billion loss in Boeing’s space and defense unit for Q3, and means the company has accrued $883 million in Starliner-related charges over more than two years as it works to complete development on the capsule and fly astronauts for NASA. – CNBC / Boeing
  • OneWeb resumes satellite campaign with successful Indian launch: After Russia’s invasion of Ukraine shut down OneWeb’s launches with Soyuz rockets, the company returned from a hiatus and deployed 36 satellites through ISRO, one of its new launch providers. – OneWeb
  • AST SpaceMobile slashes quarterly cash burn, prepares to unfold BlueWalker 3 test satellite. The satellite-to-smartphone company reported preliminary Q3 results that saw its cash reserves decrease by just $3 million, versus an average of $60 million in recent quarters, due to proceeds from selling an investment and tapping an equity program. AST expects to begin the critical phase of unfolding its satellite’s antennas as soon as next week. – AST SpaceMobile
  • Aerojet Rocketdyne sale still on the table, as the defense and space manufacturer is reportedly soliciting offers after its $4.4 billion sale to Lockheed Martin was effectively blocked on anti-trust grounds earlier this year. – Reuters
  • White House opens talks with Musk over using Starlink in Iran: Officials of the Biden administration reportedly spoke to SpaceX’s CEO about how the satellite service could support Iranian protestors. – CNN
  • Northrop Grumman’s space business had $3.2 billion in sales for Q3, up 18% compared with the same quarter a year ago. But higher costs to complete contracts, as well as spending on early-stage development programs, lowered the unit’s operating margin for the quarter. – Read more
  • SpaceX adds $2,500 “flat high-performance” antenna to Starlink mobile offering. The company is now offering an antenna “for in-motion use,” especially on vehicles, with service priced the same as the standard offering at $135 a month and deliveries expected to begin in December. – SpaceX
  • Relativity unveils 4th generation metal 3D-printer, to manufacture its coming reusable Terran R rocket. – Relativity

Industry maneuvers

  • NASA orders $2 billion contract from Lockheed Martin for more Orion capsules. The agency expanded its previous deal with the contractor, asking for three more spacecraft for future Artemis lunar missions. – Lockheed Martin
  • Andreessen Horowitz-backed Apex Space raises $7.75 million to take on manufacturing satellite buses at scale. – CNBC
  • Array Labs raises $5 million to build radar satellites that gather 3D imagery. – SpaceNews
  • Former NASA chief Jim Bridenstine added to Firefly Aerospace advisory board, the latest company he’s joined in the private sector. – Firefly
  • BlackSky appoints former investment advisor Jon Kirchner as chief product officer. – BlackSky

Market movers

  • Boeing stock fell nearly 9% on Wednesday after reporting its Q3 results. The stock is down 30% year to date. 

On the horizon

  • Oct. 31 – SpaceX’s Falcon Heavy scheduled to launch the USSF-44 mission from Florida for the U.S. Space Force, in what will be the rocket’s first launch in about three years. 

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