Companies and entrepreneurs around the world are working on more than 100 new small rocket projects, but industry officials expect the restructuring to produce only a handful of survivors.

Some commercial launch vehicles have already carried satellites into space, carried by deep pockets and prominent rear supports, for example.

Lockheed Martin Corp.

and a British entrepreneur

Richard Branson.

Others are testing launchers, using earlier start-up funds and sometimes reducing budgets. According to officials, an even greater number of early-stage development projects could be blocked by a potential lack of funding.

However, all competitors face the same market reality. The increasing use by corporate, civilian and military customers of compact satellites weighing several tons, ranging from toaster-sized models to refrigerator-type versions, will not generate sufficient demand to support the current influx of small launchers.

“Can the industry support 100 new start-ups? Of course not,” said Chuck Beams, president of York Space Systems LLC, a manufacturer of small satellites, and a former Pentagon official who also heads a trade association that advocates small spacecraft. A more realistic figure, he said, is that of four healthy small rocket operators and a few wealthy companies flying larger commercial boosters.

The latter group, which is primarily aimed at another segment of the large satellite market that is moving toward higher orbits, includes

Elona Muska

SpaceX, the European company Arianespace SA and Blue Origin Federation LLC, led by

Director General

Jeff Bezos.

United Launch Alliance, een joint venture

Boeing Co.

and Lockheed Martin, specializing in the transportation of large Pentagon satellites. For all of them, transporting small satellites is a secondary task.

Large satellites move more than 22,000 miles above the earth while remaining stationary over the same point on the globe. They are designed for espionage, reconnaissance, civilian and military communications, and the transmission of video signals. Some cost hundreds of millions of dollars each.

The SpaceX spacecraft prototype has landed on its second test flight. About two months earlier, Elon Musk’s company launched a spacecraft that landed in an equally explosive fireball. Photo: Gene Blevins/Reuters

A new generation of small satellites orbit the Earth at altitudes of hundreds of kilometers, but they are often equipped with advanced sensors that can perform the functions of the larger versions. They are increasingly being used in areas such as earth observation, communications, climate change data collection and enemy missile detection. Some proposed mega-constellations plan to deploy thousands of small satellites to provide Internet connectivity on a large scale. The latest generation of compact satellites could cost tens of thousands to millions of dollars.

The small rocket sector is attracting increasing attention as forecasts expect a boom in the production of small satellites. The number of these satellites put into orbit last year is estimated at 1,200, and more than 10,000 are expected over the next decade. By comparison, about 400 small commercial satellites were launched between 2015 and 2018, according to the consulting firm Frost & Sullivan.

Can the industry support 100 new start-ups? Of course it can’t.

– Chuck Beams, president of York Space Systems

To date, small rocket manufacturers have received a disproportionate share of investment. It is estimated that nearly half of the venture capital invested in commercial space last year was spent on a number of launcher-related developments, although this segment accounts for only a small portion of the industry’s total sales.

Some seasoned astronauts have compared the current situation to the space investment bubble of the late 1990s, when a tidal wave of ambitious satellite projects gave rise to optimistic predictions of an explosive surge. In the end, almost all of these satellite plans failed due to enormous technical and financial obstacles, leaving the launch industry struggling with a sharp decline in planned activity.

Billionaire entrepreneur

Craig McCaw,

One of the main investors affected by past failures is a small rocket booster. Twenty years ago, he recalls, it could take years to build a single satellite. Today, according to McCaw and others, equipment for satellites and launchers is much smaller, cheaper and faster to assemble, and demand is increasing.

Old industry standards have been cast aside, he said, joking that “dinosaurs sometimes take a long time and a lot of energy to die.”

Traditionally, large rockets designed to carry multi-ton satellites, the size of a school bus, can also carry smaller spacecraft in what are called “donkey rides.” However, the placement of spacecraft in “shared rides” depends on the schedule and orbit dictated by the main customer.

Smaller rockets are designed to carry lighter satellites into specially designed orbits. Launchers compete on the basis of price, scheduling flexibility and optimal orbital positioning. The prices are just a fraction of the roughly $60 million that SpaceX (Space Exploration Technologies Corp.) charges Mr. Musk for launching larger satellites.

Virginia orbital rocket. Richard Branson with a rocket under the wing of a modified Boeing 747 for launch and test last month in Mojave, Calif.


Gene Blevins/Zuma Press

Many rocket manufacturers and their customers expect little long-term success from small start-up suppliers. “In the end, few of them will get corporate funding because the demand for startups is limited,” he said.

John Serafini,

The CEO of Hawkeye 360 Inc, a company that operates satellites to monitor radio frequencies on Earth, some of which are used by


SE. Last week,

Tori Bruno,

The CEO of the Boeing-Lockheed joint venture for missiles said the market for launchers is overheating because too many missiles are chasing too few customers.

Some precursors are of a new breed of booster. Virgin Orbit LLC, backed by Branson, and Rocket Lab Ltd. a New Zealand-American space company partially funded by Lockheed Martin, have become thriving rocket technology and launch facilities. Astra Space Inc, the Northern California-based rocket builder that plans to launch McCaw this summer, reached the limits of space, but not of orbit, during a demonstration flight late last year.

When the National Aeronautics and Space Administration awarded demonstration launches to small rocket companies in December, the agency concluded that Astra had submitted the most compelling proposal because of its rocket design.

Other startups are planning their first launches this year. Firefly Aerospace Inc. is a spin-off from a bankrupt company. The company recently announced $350 million in funding and has been awarded a $93 million contract by NASA to conduct experiments on the lunar surface. ABL Space Systems Co. has won several contracts with the Air Force and is counting on its mobile launcher concept to differentiate itself from the competition.

Relativity Space Inc. with an investment of more than $600 million. The company is making progress in expanding 3D printing of rocket parts and using advanced manufacturing technologies to improve the performance of its launcher.

The flexibility of small launchers is essential to the new space ecosystem, he said.

George Stafford,

Co-founder and CEO of Blue Canyon Technologies, a small satellite manufacturing company.

Raytheon Technologies Corp.

He describes the operating principle as “fly fast, fail fast.”

“But you have to be comfortable with that,” he said.

Email Andy Pashtor at [email protected]

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