Each satellite in Capella’s planned constellation will come equipped with a large, powered, 8-square-meter antenna. An antenna that folds neatly into the body of its satellite before launch. A satellite that’s less than two feet long and weighs less than 36 kg. Government satellites built a decade ago to do the same job are the size of a school bus.
That trend of miniaturizing satellites is driving a new space race: one to build small rockets to launch the new breed of small satellites. Backed by investors including Richard Branson and the late Paul Allen, rockets that clock in at less than a quarter of the weight and size of heavyweight peers are carving out a new frontier in commercial space. Companies like Rocket Lab, which last week sent its third small rocket into space, are filling a demand by satellite customers that want to control when and where their launch happens.
“The lightweight launch industry is becoming extremely competitive,” said Bill Ostrove, an analyst at research firm Forecast International, who says there are nearly 100 companies around the world to build these markets.
There’s a reason for the competition. The technological trends that turned a computer from the size of a room to the size of an iPhone are shrinking satellites, too. What took a billion dollars and a satellite the size of a car to do 20 years ago can now be done with a satellite the size of a wine bottle that costs just a few thousand dollars to build.
According to a report from research firm Bryce Space and Technology, nearly 1,000 small satellites (defined as satellites with a mass less than 600kg) were launched between 2012 and 2017; 335 just in 2017—about six times more than were launched in 2012.
Those numbers are going to keep getting bigger. According to venture firm Space Angels, over $370 million of venture capital flowed to satellite companies in the third quarter of 2018 alone. There’s a growing demand for the data that comes from satellites, and a new small-satellite market will be opening up as companies like OneWeb and SpaceX launch hundreds of small satellites to low Earth orbit over the next few years to provide high-speed internet service.
Most small satellites—such as ones from Planet, which take images of the Earth’s surface, or Spire Global, which track ship movements, get to space by hitching a ride with bigger payloads. Customers might share a ride with a larger satellite on a SpaceX rocket or one from Northrop Grumman. Additionally, small satellites are packed in with other supplies headed for the International Space Station, later to be released from a small-satellite launcher owned by Nanoracks.
Small rockets change that model by letting the customer control where and when satellites launch. It’s more expensive than the current routine of piggy-backing off other space trips. But it gives the customer control of its own schedule and what orbits it can place its satellites.
It’s the difference between taking a bus and a taxi, says Curt Blake, president of Spaceflight, a company that helps satellite companies arrange launches.
“If I want to got to a Seahawks game, I take the bus because it’s cheap and people want to go there at the same time,” he said. “But if you want to go somewhere that few people want to go to, or you want to go to a popular place when not everyone else does, like if I want to got the Seahawks stadium on a Friday when nobody’s there, I need a taxi. The bummer is that the price per kilogram is going to be higher. But I also get to dictate my own schedule.”
For other applications, it’s not just the schedule of a satellite launch that matters, but also the orbit that satellite needs. That’s why small launch vehicles are attractive to Capella’s Banazadeh. “If we want to launch 36 satellites in a specific geometry, there’s no way to do that with with traditional launches like SpaceX. You’re UberPooling—and big satellites don’t go to these orbits.”
Investors are funneling money into the market. Rocket Lab just announced a Series E round of $140 million, bringing its total funding to over $288 million. The company is valued at over $1 billion. Additionally, in October, another small rocket company, Vector, raised a $70 million Series B round.
Vector, which was founded by former SpaceX engineers, performed its first test launch last year and is aiming for its first orbital flight soon. Other small launch competitors are also getting close to their first launches.
Virgin Orbit, a spinoff of Branson’s Virgin Galactic, recently completed a key test of its systems and is expected to launch its first satellites with in a few months. Rather than launch vertically, its rockets will be carried into the atmosphere by a jumbo jet and launched from the air, which provides some advantages in when and where its launches can happen. And Stratolaunch, founded by the late Paul Allen, also plans on launching its rockets from planes and just completed a key engine test.
This new space race isn’t limited to the United States. In the U.K., small-launch company Orbex has raised nearly $40 million in funding and is working to launch from a spaceport being built in Scotland by the Scottish Highlands and Islands Enterprise. Australia-based Gilmour Space Launch has raised over $13 million and plans to launch its test rockets in 2019. Two Chinese small launch companies—iSpace and OneSpace—successfully launched suborbital tests earlier this year.
The payload is the smallest part of that rocket, and for a rocket launch to be economically viable, the ratio of the weight of the payload to the rocket’s fuel and structure needs to be above a certain level. This makes small launches tricky.
“When you scale down, structure becomes a bigger part of the rocket,” said Dr. Ella Atkins, a professor of aerospace engineering at the University of Michigan and an IEEE senior member. “It’s going to be hard to keep mass fraction at the same value as it was for larger rocket. You lose some economy of scale.”
That complexity—combined with the sheer number of players in the market right now—means it’s likely that a lot of the companies working to put together rockets now may not be around in a few years, says Spaceflight’s Blake. “Not all of them will make it—there will be a natural attrition based on price and ability to hit schedules.”
Still, the demand for rocket launches is real, and Forecast analyst Ostrove says that those companies that do survive will have a ready supply of customers: “It’s clear that the market is a little overheated right now. However, that doesn’t mean there won’t be a market for lightweight launch vehicles. Small satellites continue to be sold and will need launch vehicles to carry them to orbit.”