Satellite Launch Startups Draw Investor Interest
SPACs Eye Satellite Launch Companies
Jeff Bezos and Richard Branson’s race to send people to space gets a lot of attention, but the companies which launch satellites into space deserve a look too. That’s what a number of SPACs, or special purpose acquisition companies, appear to think. SPACs are merging and taking many satellite-launching companies public, including Virgin Orbit, Rocket Lab (RKLB), and Astra (ASTR).
Underpinning the interest in these satellite-launch companies are big advancements in miniaturization, which has reduced the cost of making satellites. Launching constellations of small satellites into low orbit provides new opportunities for companies like SpaceX, which plans to bring broadband internet to far-flung places.
It is potentially a big market. Of the $1 trillion Wall Street projects that the space market will earn by 2040, nearly half could be from satellites.
Rocket Lab Ahead of Rivals
Satellite companies which need a launch partner often turn to SpaceX’s Falcon 9, which offers a low price per kilogram. Satellite companies do have to compete to get space aboard the shared launcher. If the startups could provide a dedicated service at a cheap enough price, it could tip the market their way.
As it stands, Virgin Orbit is the cheapest alternative, launching rockets 35,000 feet off the ground from a 747 aircraft. The startup has completed two successful launches. Astra, which already counts NASA as a customer, has failed in three consecutive test launches, while Rocket Lab has already sent over 100 satellites into space.
Competition Is Fierce
The satellite-launch companies may be attractive to some investors because they are trading at lower valuations than their spaceship counterparts. Rocket Lab currently trades around 28 times the earnings it forecasts for 2025, while Astra is trading at four times, and Virgin Orbit is at around six times. However, competition is fierce among the startups.
Space tourism is no longer a fantasy, providing investors with different ways to play the market. SPACs have been focusing their attention on the satellite-launch companies. It will be interesting to see how the market progresses as more money pours into it.
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