Analysis:Rocket startups face adapt-or-die moment amid investment drought

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WASHINGTON : Demand for sending satellites into space remains strong, but U.S. rocket startups are taking drastic measures to survive a tight funding environment where fears have been exacerbated by the bankruptcy of Virgin Orbit.The industry faces an interesting dichotomy. Demand has surged from launchin

WASHINGTON : Demand for sending satellites into space remains strong, but U.S. rocket startups are taking drastic measures to survive a tight funding environment where fears have been exacerbated by the bankruptcy of Virgin Orbit.

As the cost of capital rises with the Federal Reserve's interest rate hikes, investors are less incentivized to fund capital intensive projects that do not have a clear revenue stream or path to profitability, leaving many space startups scrambling for funds. Texas-based Firefly is trying to mass-produce its medium-sized rocket, while developing a larger launcher under a new partnership with Northrop Grumman.

The bigger rocket's planned debut in 2026 will leave the company without any missions for roughly three years, but Ellis said he is not worried about future funding and declined to say when the company would do another funding round. Firefly, which was forced by U.S. officials in 2021 to sever its Ukrainian ties through Noosphere Ventures over national security concerns, counts a lunar lander named Blue Ghost as a"very profitable" line of revenue, Weber said.

 

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