When a Falcon 9 lifted off from Vandenberg Space Force Base June 12, it carried a broad cross-section of the overall smallsat industry. Transporter-8, SpaceX’s eighth dedicated rideshare mission, included 72 payloads for deployment into a sun-synchronous orbit. Several companies developing constellations had satellites on board, like radar imaging company Iceye, optical imaging company Satellogic and weather and tracking company Spire. Several smaller companies and organizations had spacecraft on board, as did aerospace giant Lockheed Martin, which deployed four satellites for DARPA’s Blackjack program.

Some of the customers on Transporter-8 were flying their first satellites, but none had an experience quite like Starfish Space. The startup was flying its Otter Pup spacecraft, to demonstrate satellite servicing technologies, as part of an orbital transfer vehicle (OTV) developed by Launcher. However, Launcher’s OTV started spinning uncontrollably shortly after separation from the Falcon 9’s upper stage, an anomaly Launcher later blamed on software.

Launcher deployed Otter Pup and its other payloads, but Starfish Space said it was struggling to recover control of the spacecraft. “Given the events experienced post-launch and the current state of the satellite, it is unlikely that Otter Pup will be able to continue with its mission,” the company said in a statement a couple weeks after the launch. “However, we will continue to try to save Otter Pup, and we are grateful for the continued support of our mission partners.”

Such drama is, fortunately, the exception to the rule for rideshare launches, which have become increasingly routine. However, the industry itself is facing upheaval. As interest in smallsats grows, more companies have entered the market to arrange launches and provide additional services, like OTVs for “lastmile” delivery of rideshare customers to their destinations. Those companies are also finding it difficult to find alternative rides in a launch market where a single company — SpaceX — is dominant.

Increasing demand and increasing size

Satellites have launched as secondary payloads for decades. For much of that time, however, those payloads were arranged on a one-off basis, hitching rides ad hoc on rockets with room to spare. Growing interest over the last 15 years in cubesats, often developed by universities or startups, led to the emergence of rideshare aggregators, companies that would serve as an intermediary between satellite developers looking for rides and launch service providers with excess capacity for sale.

“The rideshare market continues to grow annually with increased demand from new commercial, academic and government customers, as well as from our long-term customers expanding their constellations,” said Jeanne Allarie, chief commercial officer of Exolaunch, a German company that provides rideshare launch services.

Exolaunch has launched more than 300 smallsats as rideshare payloads, primarily on Transporter missions.

But as the demand for rideshare launches grows, the customers for those launches are changing. Renato Panesi, chief commercial officer of Italian rideshare operator D-Orbit, says his customers fall into two broad categories. The biggest customers for his company are smallsat constellation developers looking to build out their systems. The other major group are startups, universities and governments looking to launch their first satellites.

Those two customer sets are moving in different directions. The constellation market is not growing as fast as projected a few years ago, which D-Orbit suspects is due to a combination of supply chain issues affecting the satellite industry and challenges raising capital.

In the other category, Panesi said the company has seen an increase in demand from regions like Latin America and the Middle East that are just starting to get involved in space operations. “That is a very good signal if we consider that one of the goals of the community is to democratize access to space.”

The size of smallsats seeking rides is also changing. “Many of our cubesat customers are growing in size or even going to the microsat form factor to increase their capabilities and performance,” said Allarie. “Microsats are growing in mass and volume too, taking advantage of cost-efficient rideshare launches.”

D-Orbit has also seen microsatellites get heavier, converging on a range of 120 to 150 kilograms. “It’s like mobile phones,” Panesi said. “They were big in the ’90s, and then they became smaller, only to become bigger but more powerful.”

Customers are increasingly looking for more than just a port on a payload adapter. Several rideshare companies have developed or are working on OTVs that can provide “last-mile” delivery of satellites after deployment from the launch vehicle as well as accommodate hosted payloads. That includes D-Orbit, which has flown its ION vehicle 11 times.

Those added capabilities bring with it additional complexity and challenges, as the Launcher OTV problem on Transporter-8 illustrated. Momentus ran into problems with its first Vigoride OTV launched last year but had more success with two vehicles launched this January and April. Those missions were not complete successes, though: Momentus said July 28 that two NASA cubesats carried on its Vigoride-6 tug in April were deployed in the wrong orbit, which it blamed on “human error in the mapping of a software command.”

Spaceflight bows out

One of the pioneers of the modern rideshare industry was Spaceflight. The Seattle-based company had arranged launches for hundreds of smallsats on more than 50 launches, from Astra’s Rocket 3.3 to India’s PSLV and SpaceX’s Falcon 9. That included buying an entire Falcon 9 for its SSO-A dedicated rideshare mission in 2018, a forerunner to SpaceX’s own Transporter series of missions.

It was a surprise to many in the industry, then, when Firefly Aerospace announced June 8 that it had acquired Spaceflight for an undisclosed sum. Firefly said it acquired Spaceflight to improve its ability to offer end-to-end space transportation services along with its Alpha launch vehicle and Space Utility Vehicle transfer vehicle.

“With a high market demand for our on-orbit services and rapid response missions, this acquisition uniquely positions Firefly to respond immediately to our customers’ needs,” Bill Weber, chief executive of Firefly, said in a statement about its purchase of Spaceflight.

Firefly said it would retain Spaceflight’s payload processing facility and its workforce. However, it no longer plans to continue Spaceflight’s main business of arranging rides on a variety of non-Firefly launch vehicles.

“We’re currently assessing the needs of our combined customers to meet their mission requirements with Firefly’s launch vehicles,” Firefly spokesperson Risa Schnautz said. “Firefly will honor Spaceflight’s current contracts but will not be aggregating payloads on other launch vehicles moving forward.”

Neither Firefly nor Spaceflight offered more details about the deal that effectively takes a major rideshare aggregator off the market. Some in the industry have speculated that Mitsui & Co. and Yamasa Co., the Japanese companies that bought Spaceflight in 2020, were no longer interested in investing in Spaceflight’s development of the Sherpa line of tugs. Spaceflight also had a strained relationship with SpaceX, with SpaceX informing rideshare customers in March 2022 it would no longer work with Spaceflight beyond missions already manifested.

Other rideshare companies are still weighing the effects of Spaceflight’s exit. “Our pipeline is continuing to grow, but it’s not connected with Firefly’s acquisition of Spaceflight,” said Exolaunch’s Allarie. “This event hasn’t had an impact on our business.”

“I think it’s too early to say,” said D-Orbit’s Panesi. He noted the two companies had collaborated in the past, with D-Orbit taking some Spaceflight customers when a Sherpa tug suffered a fuel leak and had to be taken off a Transporter launch. “It was amazing to work with them, and I hope we can continue to do so in the future.”

Small launcher competition

A few years ago, rideshare launches seemed like they might become a thing of the past. The rise of small launch vehicles, with dozens in development, promised more frequent, tailored access to space for most smallsat developers, who would be able to get their satellites into their desired orbit when they needed to. In that scenario, only the most cost-conscious customers would stick with rideshare.

It hasn’t worked out that way so far, though. The last year has been filled with delays, failures and bankruptcies. The first launches of ABL Space Systems’ RS1 and Relativity Space’s Terran 1 both failed earlier this year, with Relativity subsequently deciding to retire the Terran 1 to focus on the much larger Terran R. Astra retired the failure-prone Rocket 3.3 to work on the larger Rocket 4. Launcher halted plans to develop its own launch vehicle after being acquired by space station developer Vast. And, most spectacularly, Virgin Orbit filed for Chapter 11 bankruptcy in April, three months after a launch failure, with its assets auctioned off in May.

For now, rideshare companies don’t see much competition from small launch vehicles. “Rocket Lab is the only company up and running providing recurring launches with Electron, and they have a limit in terms of capacity,” said Panesi. “All the other newcomers still have to demonstrate they can make it.”

Rocket Lab, meanwhile, isn’t concerned about competition from rideshare providers. “What we find is that customers will send up a couple of spacecraft on a Transporter, do a mission demo, and when they actually need to build out their constellation to their desired orbits, that’s when they come and see us,” said Peter Beck, chief executive of Rocket Lab.

He said he was seeing far more “defections,” as he put it, from Transporter missions to Electron than the other way around. He added that his company was also picking customers from other small launch vehicle companies.

Rideshares and small launch vehicles are also not mutually exclusive. Exolaunch arranged the launch of Telesat’s LEO 3 demonstration satellite on an Electron in July, a rideshare mission that also carried cubesats from NASA and Spire.

D-Orbit signed a contract in 2022 with Isar Aerospace, a German company developing the Spectrum small launch vehicle. Panesi said that would give its customers greater flexibility in choosing their orbits. “We can decide when to launch. We can decide what orbit,” he said. “That improves the time to our target orbit.”

SpaceX’s Transporter series of missions, such as Transporter-8 that carried 72 payloads June 12, now dominate the smallsat rideshare market.

Dependence on SpaceX

While small launch vehicle companies have struggled to get their vehicles flying, those working on larger vehicles have not done much better. The combination of retirements of vehicles like the Ariane 5, delays in the development of Ariane 6, New Glenn and Vulcan Centaur, and the withdrawal of Soyuz from the market has created a lack of capacity for commercial and government customers alike.

That extends to rideshare aggregators as well. For many companies, Transporter missions, along with the occasional secondary payload opportunity on other Falcon 9 launches, are the only game in town for flying their payloads.

“SpaceX is the only alternative if we think about recurrent flying,” D-Orbit’s Panesi said. “This is, I think, an issue for end users because they basically have to develop their business plans based on SpaceX’s offering. They launch only when SpaceX launches.”

Rideshare companies are working to diversify their launch opportunities. D-Orbit launched its first mission on a Vega in 2020, and the company expects to launch future missions on the Vega-C. That vehicle, though, remains out of service after a launch failure in late 2022 and may not resume launches until 2024.

Exolaunch, besides arranging the Telesat satellite on an Electron, also flew several secondary payloads on a PSLV launch in late July, and Allarie said the company was looking at vehicles like Ariane 6, Vega-C and Isar’s Spectrum in the future. However, the bulk of its smallsats fly on Transporter missions.

Rideshare companies continue to use SpaceX not because it’s the only major option but also because, they say, it provides them a good service. “SpaceX has completely changed the paradigm of rideshare launches,” she said. “Rideshare launches have never been so reliable and affordable.”

“The relationship is very good,” Panesi said. Customers like flying on Falcon 9 because its reliability results in lower insurance costs and because the Transporter missions fly on a regular schedule without significant delays. “SpaceX is perfect for our rideshare missions.”

While SpaceX sells space on its Transporter missions to rideshare aggregators, it also sells directly to satellite operators, who presumably get better rates than if they went through an aggregator. Rideshare companies say they have not seen evidence of SpaceX poaching customers or otherwise undermining their businesses.

Allarie said Exolaunch complemented SpaceX by handling the complexities of managing multiple customers. “SpaceX has been an ideal launch provider in all senses.”

Rideshare companies can also provide opportunities on missions that are otherwise sold out. As of late July, SpaceX’s own rideshare website listed no openings for launching a single smallsat before mid-2025.

Panesi expects the rideshare industry’s dependence on SpaceX to continue through next year. “I think the turning point will be the end of 2024 or beginning of 2025,” he said, as new vehicles enter service.

That strong demand for launch services means that rideshare will continue to be an option for the foreseeable future, even amid the upheavals in the industry and the shifting launch options, as companies and organizations look for the best opportunities to fly their satellites. Even potential competitors in the small launch industry say rideshare options are here to stay.

“If you don’t mind riding the bus to a particular orbit, that’s the best value thing you can do, so you should do that,” said Rocket Lab’s Beck of rideshare missions. “If that’s what’s required, then that’s filling a great market opportunity.”

This article originally appeared in the August 2023 issue of SpaceNews magazine.

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...