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Analyst: Dangers ahead for small launcher market

November 2, 2022

Quilty Analytics, in its latest in-depth study, says that the success of SpaceX has prompted more than 100 new launch start-ups entering the fray with most focussing primarily on smaller launch vehicles. But the report cautions that many will not be successful.

Quilty says that historically, the business of designing, building, and operating launch vehicles was primarily limited to national governments. Encouraged by the success of SpaceX, however, more than 100 new launch start-ups have entered the fray, focusing primarily on small launch vehicles.

“The top 20 of these start-ups have raised nearly $4.5 billion to build new rockets optimized for missions ranging from cubesats to LEO broadband spacecraft. But despite the large sums raised, many are revising their business plans before they even reach orbit by designing bigger rockets, changing core technologies, and sometimes diversifying beyond launch.”

Quilty adds that this small launch market is very much in an “emergent” state that has not yet proven itself commercially viable. The report is painfully blunt, but probably painfully accurate, noting: “The overwhelming majority won’t survive. While many are banking on securing mega-constellation customers, governments may prove to be more reliable anchor targets.”

The report says that there’s simply insufficient demand to support all the new small launch firms.

“As launch start-ups recognise the demand equation doesn’t work in their favour, the number introducing new small launch vehicles continues to shrink. Those that remain are pivoting to heavier vehicles, often at least 1,000kg to LEO, and increasingly relying on government support. They are also raising prices, pursuing reusability, and, in some cases, diversifying into business areas outside of launch,” suggests Quilty.

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