Foust Forward | Small launchers on the bubble
The space industry has in recent years marveled at, and shook its head about, the interest in new small launch vehicles. The many dozens of vehicles — 100 or more by some accounts — in varying stages of development is far more than even the most optimistic estimates of smallsat demand can support. Each year for the last several years, industry officials warned that this would be the year the small launch vehicle bubble bursts.
But, stubbornly, that bubble has not only failed to burst, it’s gotten larger. More ventures around the world have announced plans for small launchers. Astra, Rocket Lab and Virgin Orbit all went public last year through SPAC mergers, raising hundreds of millions of dollars each. ABL Space Systems and Relativity Space also raised huge private rounds.
It would be foolish, then, to predict that 2022 will be the year the small launch vehicle bubble bursts. However, what we may see instead is the beginning of a shakeout within the industry, with a few companies emerging that can demonstrate the ability to do regular launches. That will put those startups still raising money and developing rockets at a severe disadvantage.
All the major small launch vehicle companies face their own challenges. Rocket Lab is arguably at the forefront with its Electron rocket that has now flown nearly two dozen times. The company, though, has struggled to increase its launch rate: the six launches it carried out last year was actually less than in 2020, which it blamed on a launch failure as well as pandemic-related restrictions in New Zealand.
“It’s been a real tough year,” said Peter Beck, Rocket Lab’s chief executive, in a media call in November. “We’re going to have to have a very, very busy 2022 to both clear backlog and catch up.” The company has not announced how many launches it’s planning for 2022 and, as of early January, had not set a date for its next mission.
Astra and Virgin Orbit joined the small club of companies that launched payloads into orbit last year, and now must demonstrate they can do so routinely. Virgin Orbit’s next launch is scheduled for as soon as Jan. 12, after which the company expects to perform as many as six more launches the rest of the year. Astra’s next launch is projected for some time in January from Cape Canaveral, Florida, and the company has plans for launching monthly by next year.
All three face the added scrutiny of being public companies, including disclosures of just how well they’re doing compared to the bullish projections they made when going public last year. Wall Street has not been kind to them so far: in its first week of trading after going public Dec. 30, Virgin Orbit’s stock chart looked less like a LauncherOne heading to orbit and more like its 747 aircraft descending to a landing.
Then there are the companies yet to make it to orbit. Firefly’s first launch in September ended with an explosion in the skies above Vandenberg Space Force Base, but the company was happy with the progress they made. Its challenges may be less about the rocket than about the business itself: its next Alpha launch is on hold until Noosphere Ventures, its largest shareholder, sells its stake at the request of the federal government over foreign ownership concerns, a process that could take months.
ABL and Relativity also have first launches projected for this year, but neither company has said much about their plans. “We’re doing our first launch in a few months,” Tim Ellis, chief executive of Relativity, said at World Satellite Business Week in December. However, the amount of work he said was still ahead, including qualification of the engines and stages and completion of the launch pad at Cape Canaveral, suggests it could be more than a few months.
Those companies that can end the year launching on a regular basis will demonstrate to the market the viability of their technologies and business plans. The rest may find themselves on the bubble.
Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. His Foust Forward column appears in every issue of the magazine. This column ran in the January 2022 issue.