Launch after launch

Introduction

The launch market is being compressed from both ends. At the top, Starship and the rise of super heavy lift are turning launch into vertical infrastructure, a capability increasingly internalized by operators rather than sold as a standalone service. At the bottom, micro launchers are losing their commercial rationale as satellites become heavier and more capable, while the expected high-volume cubesat market has not materialized at the scale once projected. As the narrow commercial window changes, defense applications, from integrated air and missile defense to hypersonic testing and tactical space infrastructure, are emerging as a significant new demand layer for launch technologies and propulsion capabilities.

SpaceX’s market dominance is reshaping launch pricing… up!

Between 2022 and 2026, rideshare customers faced steadily rising costs, with median prices increasing by 14% for smallsats and 18% for cubesats based on data collected by Starburst through its portfolio companies.

Rather than passing reusability-driven cost improvements through to customers, SpaceX has pursued the opposite pricing strategy, increasing its smallsat rideshare rate by $2,000 per kg between 2021 and 2026, representing a 40% total increase over the period.

Its control of the dominant share of global rideshare supply, combined with extended wait times for specific orbital slots in 2023 and 2024, has reinforced its pricing leverage, as no competitor has been able to match its launch cadence or mission reliability.

SpaceX pricing evolution – Most smallsats customers launch on rideshare – SpaceX, Payload

SpaceX’s dominance sets the benchmark for all dedicated launch operators. The gap is expected to widen with the arrival of Starship, SpaceX’s next generation super heavy launcher, designed to deliver over 100 metric tons to LEO (Low Earth Orbit). Customers able to fill an entire Starship payload may benefit from significantly lower per kg costs, while smaller rideshare customers face a more uncertain outlook, both because of rising prices and because SpaceX’s long term commitment to this segment remains unclear.

1. Super heavy launch is emerging from a bifurcating orbital economy

Three drivers of heavy lift demand

Super heavy launch, defined as vehicles capable of lifting more than 50 tonnes to orbit, is emerging as a central pillar of space infrastructure business cases. Demand is being driven by three structurally different markets: proliferated LEO commercial and government constellations, deep-space exploration architectures, and the emerging low-Earth-orbit economy. According to Starburst analysis, these segments could require approximately 70 heavy-lift launches annually by 2035, assuming vehicles with roughly 60 tonnes of payload capacity, representing an estimated $4 billion annual launch market.

• Commercial and government LEO mega constellations, spanning connectivity and national security applications, represent the near term anchor for heavy lift demand.
• Deep space programs, including lunar and Mars exploration, as well as associated cargo and orbital refueling architectures, structurally rely on super heavy lift. Without vehicles in the 60 to 100 tonne class, these missions would either be technologically constrained or prohibitively expensive at the scale envisioned for 2035.
• The emerging LEO economy, covering commercial space stations, in-orbit manufacturing, space tourism, on-orbit servicing, and space logistics, further expands the heavy-lift total addressable market.

Annual 2035 estimate based on announced public and private programs  (excluding Starlink) – Starburst

Heavy launch winners will monetize orbital infrastructure, not launch services

A paradigm shift is underway with the rise of super heavy lift. For heavy launch providers, value is increasingly defined not by the sale of launch services alone, but by control of the integrated launch and space infrastructure. Super heavy lift enables companies to command a broader share of the orbital value chain through infrastructure ownership, economies of scale, and proprietary constellations or orbital assets. SpaceX illustrates this logic: by pricing Starlink launches internally (below market rates), it gives its own constellation a structural cost advantage and shows that the core value increasingly lies in controlling the underlying infrastructure, not simply selling access to orbit.

The heavy lift landscape is therefore evolving rapidly, moving from a government dominated capability toward a backbone of the commercial orbital economy. Starship, designed to deliver 100 tonnes (t) to LEO in a reusable configuration, has already secured its first commercial contract with Voyager Space for the Starlab station at $90 million per launch. By comparison, NASA’s Space Launch System is estimated to cost more than $2 billion per launch: over 20 times as much.

SpaceX leadership has also discussed long-term internal cost targets ranging from $2 million to $10 million per launch, underlining the scale of potential disruption if super-heavy-lift economics are achieved.

A growing number of heavy-lift launch systems are being developed worldwide. Starship and Long March 9 both target payloads above 100t, representing a generational leap in lift capacity. Falcon Heavy, at 25-64t to LEO (depending on configuration), is the only operational vehicle in this landscape, making it the de facto ceiling for what can actually be booked today. Non-American programs are emerging in China, but Europe and India currently have no equivalent capability operationally or in planning: ESA is partnering with The Exploration Company to study a heavy reusable launch system, but European commercial alternatives remain limited.

Launcher landscape >30 t payload to LEO

2. The open launch market is migrating upward

Capability requirements increasingly favor larger satellites

Satellites are also evolving, with platform capabilities increasing to meet higher performance, power, and mission requirements. According to BryceTech, the share of satellites above 200kg, excluding Starlink and OneWeb, increased by 119% between 2020 and 2024, while satellites below 10 kg decreased by 45%. A trend significant enough for BryceTech to revise its smallsat definition upward from 600 to 1,200 kg. A few operators, such as Planet and Spire, continue to rely on partly cubesat based infrastructure, but they are exceptions rather than indicators of the prevailing market direction.

2020-2024 smallsats launched by mass class, excluding Starlink and OneWeb – Bryce Tech

Several factors are pushing satellite sizing upward. A growing share of demand is tied to defense use cases, where customers increasingly favor larger satellites capable of supporting higher performance mission architectures. In parallel, expanding launch supply and higher launch frequency are making larger platforms easier to deploy, while long term pricing structures increasingly favor higher mass. As a result, satellite manufacturers are differentiating through platform capability, including onboard power, embedded compute, payload sophistication, inter satellite communications, and mission endurance, rather than production cost or deployment speed alone.

Earth observation

• Planet’s Tanager/Pelican class satellites launched in 2024 weigh around 200 kg, roughly double the previous Skysat generation, with most added mass devoted to power generation and onboard compute.
• Capella Space’s SAR satellites grew from roughly 100 kg (Whitney class) to 165 kg (Acadia).
• Hubble Network has expanded its capabilities by moving from CubeSat-class satellites to Muon Space’s 500 kg MuSat XL platform, which supports high-power phased-array antennas and significantly improves receiver sensitivity.
• Loft Orbital now offers 550 kg high-power satellites through its Orbitworks joint venture, enabling more demanding missions that require AI edge computing and multi-sensor payloads. This expands on the company’s Longbow platform, which itself evolved from 100–250 kg-class satellites.

Connectivity

• Starlink progressed from first-generation satellites of approximately 260 kg to V2 Minis at 800 kg, with full-scale next-generation platforms targeting roughly 2,000 kg to incorporate laser inter-satellite links, higher throughput, and greater power.
• New bus architectures are emerging as well. K2 Space, founded in 2022, is developing high-power satellite buses for multi-payload, multi-orbit missions, including its Giga platform designed for super-heavy launchers like Starship and New Glenn, a trajectory backed by a $250 million Series C round at a $3 billion valuation in late 2025.

Government and defense

• Escalating national security requirements have pulled military satellite sizing upward, as seen in the NRO and SDA deploying over 200 satellites in the past two years, the largest government constellation in US history. The Pentagon has shifted from SpaceX’s initial 800 kg Starshield V1 defense platforms toward multi-tonne Starshield V2 variants

Micro-launchers under pressure

The micro launcher market is contracting as satellites become larger and more capable, reducing the economic rationale for vehicles designed to carry only 200 to 300 kg to orbit. The high-volume market for small, frequent payloads that micro launchers once expected to serve has largely failed to materialize, including the rideshare aggregation segment that emerged between 2018 and 2022 on the back of cubesat demand. This trend is further reinforced by SpaceX lowering the minimum rideshare payload threshold from 200 kg to 50 kg, significantly reducing the need for aggregation models and making fragmented, lowmass cubesat architectures structurally less competitive.

The current micro-launcher market represents roughly $300–$400 million in annual value. The existing smallsat demand is now largely served by vehicles such as Rocket Lab’s Electron, which completed 21 launches in 2025, up from 10 in 2023, at approximately $8 million per launch. A few operators, such as Exolaunch, remain active and are booked through 2027, but they have acknowledged that the cubesat aggregation model is under pressure and that the business must evolve toward larger satellites and higher margin services.

New micro launcher programs face significant challenges in achieving standalone commercial viability. We observed that many have pivoted towards larger vehicles and defense applications. Europe nevertheless retains a dense pipeline of micro and small launcher initiatives, including Isar Aerospace, Rocket Factory Augsburg, HyImpulse, Latitude, PLD Space, Skyrora, MaiaSpace, HyPrSpace, and Sirius.

Launcher landscape <1 t payload

Intermediate launch is emerging as the post-rideshare market

As super heavy launchers move toward vertically integrated infrastructure models and micro launchers lose their commercial rationale, the intermediate launch segment, covering vehicles from 1 to 15 tonnes to LEO, is emerging as the most structurally attractive position in the open launch market. It addresses demand from sovereign remote-sensing constellations, government programs, and midsized commercial architectures.

Operators without internal launch capabilities are increasingly turning to dedicated missions to reach specific orbital planes and avoid the constraints of rideshare, where satellites are typically deployed into shared parking orbits with limited flexibility and longer commissioning timelines. Kinéis, for instance, paid approximately a 5x premium over SpaceX rideshare rates to launch 25 satellites with Rocket Lab, gaining more precise orbital insertion and faster operational readiness. While still a niche market today, dedicated launch is becoming increasingly valuable as satellite mass, mission complexity, and constellation performance requirements continue to increase.

Key launch vehicles ~20 t payload

This trend could accelerate further as SpaceX shifts its strategic focus from Falcon 9 to Starship. Falcon 9 currently serves as the backbone of the commercial launch market, but Starship’s economics are optimized for very large payloads and vertically integrated architectures rather than dedicated launches for independent satellite operators. As SpaceX increasingly allocates capacity and management attention toward Starship, a portion of the market currently served by Falcon 9 may seek alternative launch providers. The industry is already repositioning around this opportunity. Rocket Lab has identified roughly 8 tonnes as a “sweet spot” based on Falcon 9 and Soyuz utilization and is complementing Electron with Neutron, a launcher capable of delivering 8.5 to 13 tonnes to LEO. Similar developments are underway globally, as illustrated in the figures above, with a growing number of launch providers targeting the 1–20 tonne segment. Notably, Europe has one of the densest pipelines of intermediate launch programs, spanning vehicles from approximately 1 tonne to more than 10 tonnes to LEO.

Demand indicators also point to strong growth in the intermediate launch segment. Starburst estimates a total addressable market of approximately $250 million today, growing to roughly $800 million over the next 15 years. This estimate is based on current rideshare and dedicated launch pricing data, excludes Chinese and Russian programs, launcher-affiliated constellations such as SpaceX and Blue Origin, constellations with more than 100 satellites where heavy-lift solutions are likely to dominate a large share of deployment demand, and SDA programs for which launches have already been procured. While no clear winner has yet emerged, the market appears sufficiently large to support a new entrant and benefits from additional demand drivers originating from defense applications.

Landscape of 1t-10t payload launchers

3. Defense is becoming the 2nd market for launch companies

As the commercial launch market is being reshaped, defense is emerging as an additional source of demand for launch technologies and capabilities. Many of the core competencies required to develop, produce and operate launch systems are directly applicable to a growing set of defense priorities. As a result, launch companies are increasingly positioning themselves not only as providers of access to space, but also as suppliers of technologies and systems supporting defense programs. For some, these adjacent markets provide additional revenue streams; for others, they have become the basis for a complete strategic pivot.

Air defense is becoming a major demand layer

Recent conflicts have exposed significant shortages in Western air-defense and missile inventories while simultaneously demonstrating the growing importance of layered air and missile defense. The widespread use of drones, cruise missiles, ballistic missiles, and long-range strike systems in Ukraine, the Middle East, and the Red Sea has increased demand for interceptors, target vehicles, and supporting missile infrastructure. Governments are responding by expanding procurement programs and investing heavily in production capacity, creating one of the largest defense spending categories adjacent to the launch industry.

Many technologies and industrial capabilities used to develop launch vehicles also apply to air-defense systems. Micro-launchers share similar characteristics with tactical missile systems such as surface-to-air interceptors and target vehicles, while core competencies in propulsion, manufacturing, and avionics enable launch companies to leverage existing expertise and innovations for defense applications.

Auriga Space adapted their electromagnetic launch platform into a smaller form factor aiming at air defense applications

The scale of this opportunity is substantial. As detailed in Golden Dome report: The $200B Startup Opportunity in Air & Space Defense, the global air-defense market is estimated at $31.7–43.8 billion annually. The United States accounts for approximately 75% of this spending through missile defense, tactical air defense, SHORAD, air-to-air interceptors, and counter-UAS programs. Demand is expected to remain strong as governments replenish inventories, expand production capacity, and adapt to a security environment increasingly defined by missile and drone threats.

Hypersonic testing is emerging as an opportunistic market

Hypersonic and advanced missile programs require a growing layer of test infrastructure, including flight-test vehicles, suborbital launch platforms, ranges, telemetry, instrumentation, propulsion testing, thermal-protection testing, radomes, materials qualification, and high-speed data collection. As these programs scale, testing capacity is becoming a bottleneck. Launch companies are well positioned to support this demand because many of the capabilities developed for launch systems are also directly applicable to hypersonic and missile testing.

The opportunity extends beyond launch services. Programs such as MACH-TB are designed to expand hypersonic test capacity by using commercial providers and creating a bridge between ground testing and full system-level flight testing. MACH-TB 2.0, awarded to a Kratos-led team including Leidos, Rocket Lab, Stratolaunch, and others, has a potential value of $1.45 billion over five years. But MACH-TB is only one program. Similar testing needs exist across major missile and hypersonic programs, and contractors & subcontractors must also invest in their own capabilities to qualify propulsion systems, seekers, radomes, thermal-protection materials, avionics, control surfaces, payloads, and data links.

Ground based assets like Holloman’s 50,000+ foot High Speed Test Track cannot replicate actual hypersonic flight conditions, creating a gap that suborbital launchers are now addressing

This demand is also emerging across allied countries. Germany and Brazil are developing VS-50 through DLR-MORABA and IAE, the United Kingdom is supporting HyImpulse’s SR75 program, and France’s DGA has funded ArianeGroup’s SyLEx demonstrator. Together, these initiatives highlight a growing effort among Western governments to build sovereign hypersonic testing capabilities.

The market opportunity is becoming substantial. Quilty Space estimates the hypersonic testing market at approximately $6–$7 billion annually, while the Pentagon’s hypersonics research request increased to $6.9 billion in FY2025, representing roughly 21% annual growth. Including U.S. programs, allied sovereign test platforms, and the testing investments required across prime contractors and suppliers, hypersonic and missile testing infrastructure is emerging as a multi-billion-dollar adjacent market for launch companies.

This demand is also emerging across allied countries. Germany and Brazil are developing VS-50 through DLR-MORABA and IAE, the United Kingdom is supporting HyImpulse’s SR75 program, and France’s DGA has funded ArianeGroup’s SyLEx demonstrator. Together, these initiatives highlight a growing effort among Western governments to build sovereign hypersonic testing capabilities.

The market opportunity is becoming substantial. Quilty Space estimates the hypersonic testing market at approximately $6–$7 billion annually, while the Pentagon’s hypersonics research request increased to $6.9 billion in FY2025, representing roughly 21% annual growth. Including U.S. programs, allied sovereign test platforms, and the testing investments required across prime contractors and suppliers, hypersonic and missile testing infrastructure is emerging as a multi-billion-dollar adjacent market for launch companies.

Responsive launch and tactical space infrastructure

New space warfighting concepts increasingly require the ability to restore, reinforce, reposition, or establish orbital capabilities at short notice, compressing timelines from weeks or months to days or even hours. This emerging concept extends beyond responsive launch itself and encompasses the broader ability to rapidly generate orbital capacity in response to operational needs.

Launch companies are naturally positioned to support this evolution. However, responsiveness depends on much more than a launch vehicle. It requires an operational stack that combines ready-to-fly satellites, ready-to-fly launch systems, mission planning, ground infrastructure, range access, and mission operations. Intermediate launchers, particularly those using storable propellants, are well suited to this role because they can maintain higher levels of launch readiness and operate with fewer logistical constraints than cryogenic systems. At the same time, increasingly frequent flights of heavy and super-heavy launch vehicles may also contribute to these concepts by providing recurring opportunities to rapidly deploy payloads when spare capacity is available.

The market remains relatively small today but is growing rapidly. U.S. defense space spending continues to increase, and allied nations are expected to follow a similar trajectory. Programs such as VICTUS NOX, VICTUS HAZE, VICTUS SOL, and VICTUS DIEM illustrate the transition from technology demonstrations to operational capabilities, while approximately $168 million was allocated to Tactical Responsive Space activities in FY2026. Quantifying the full opportunity remains challenging because responsive launch, orbital security, resilience, and tactical space capabilities are distributed across multiple agencies and budget lines. Based on visible programs in the United States and allied nations, Starburst estimates the addressable market for responsive launch and tactical space infrastructure at approximately $200 million today, with the potential to exceed $700 million annually in the next 5 years as these concepts mature into operational requirements.

4. Companies already positioning for these markets

Tactical responsive launch, air defense, and missile-defense applications

After struggling to scale its commercial launch business, Astra increasingly expanded into defense opportunities. The company secured a DIU contract worth up to $44 million for a tactically responsive launch system operable from the United States, Australia, or other locations. More recently, CEO Chris Kemp has publicly positioned Astra’s rocket as a potential threat-representative target for Golden Dome interceptor testing, illustrating how launch-derived systems can support air-defense and missile-defense architectures while remaining relevant to responsive launch concepts.

Hypersonic testing and air defense

Auriga Space is extending its electromagnetic launch architecture beyond space launch and hypersonic testing into air and missile defense. The company’s approach could enable compact interceptors without onboard rocket motors, reducing dependence on constrained solid-rocket-motor supply chains. Auriga illustrates how alternative launch architectures may find their most compelling early applications in defense rather than orbital transportation.

Hypersonic testing and tactical space launch

Firefly sits at the intersection of launch, hypersonics, and tactical space. The company demonstrated responsive launch through VICTUS NOX, deploying a Millennium Space satellite within 27 hours of final orders, and later received the $21.8 million VICTUS SOL mission to support tactically responsive space operations. Firefly has also joined the MACH-TB 2.0 team supporting next-generation hypersonic testing infrastructure.

Hypersonic testing infrastructure

Although not a launch company, Hermeus demonstrates the broader convergence between aerospace, hypersonics, and defense testing. Its Quarterhorse program has been supported by a $60 million U.S. Air Force partnership and subsequent DIU-backed development efforts to mature high-speed flight-test and mission-system technologies.

Air defense and missile-defense testing

After two unsuccessful RS1 launch attempts, ABL Space Systems rebranded as Long Wall and pivoted away from commercial launch. The company now focuses on missile-defense and flight-test infrastructure, including RSX, a launch vehicle for threat replication and interceptor testing, and Ironwood, a rapidly deployable ground-support system. Prior to the pivot, the company had secured a $60 million STRATFI award and a $15 million Tactical Responsive Space contract, demonstrating the relevance of its capabilities to national-security missions.

Hypersonic testing and tactical space

Rocket Lab has evolved beyond launch into one of the most diversified participants across defense-adjacent markets. Through HASTE, a suborbital variant of Electron, the company supports hypersonic testing programs including MACH-TB. In 2025, Rocket Lab was selected for MACH-TB 2.0 and subsequently secured a $190 million block-buy agreement for HASTE launches, one of the largest commercial-hypersonic-testing awards in the sector. Through the $32 million VICTUS HAZE mission, Rocket Lab is also supporting tactical space capabilities combining launch, spacecraft, and mission operations.

Tactical space and hypersonic testbed

Stoke Space remains primarily focused on launch, but Nova’s fully reusable architecture is increasingly relevant to both tactical-space and national-security missions. The company’s reusable second stage is designed to survive orbital reentry and rapidly return to service, requiring capabilities in thermal protection, hypersonic flight, guidance, and high-temperature materials that overlap with those needed for future high-speed aerospace systems. Stoke has also been selected for the U.S. Space Force’s NSSL Phase 3 Lane 1 program, enabling it to compete for future national-security launch missions.

Hypersonic testing infrastructure

Originally conceived as an air-launch-to-orbit company, Stratolaunch has repositioned itself as a hypersonic testing provider. Its Talon-A vehicles have completed multiple Mach 5+ flights and provide reusable access to hypersonic flight conditions. The company has secured a $24.7 million Missile Defense Agency contract and a $90.8 million MACH-TB 2.0 award supporting advanced hypersonic flight-test campaigns.

Missile propulsion, hypersonic systems and tactical space

Ursa Major began as a propulsion supplier to commercial launch companies but has increasingly expanded into defense applications. Its Hadley engines power hypersonic test vehicles, while Draper and Lynx target missile, counter-hypersonic, and national-security programs. The company received a $34.9 million Air Force contract to mature the Draper propulsion system and has been selected by the U.S. Navy to support next-generation solid-rocket-motor production.

Missile propulsion and air defense

X-Bow Systems moved away from launch to focus on additively manufactured solid rocket motors, a critical bottleneck in missile and hypersonic supply chains. The company secured a $64 million Strategic Funding Increase (STRATFI) award to expand domestic solid-rocket-motor manufacturing and was later selected to support production of propulsion systems for U.S. Navy missile programs.

5. Where value will accrue

The majority of space launch is becoming infrastructure, not a standalone market

The launch market is not converging toward a single dominant format. It is being reorganized around the end-markets that launch enables. At the top end, heavy and super-heavy launch are becoming infrastructure for vertically integrated operators. The economic value of Starship is not simply that it can place more mass into orbit. Its strategic value is that it allows SpaceX to deploy proprietary infrastructure at a scale and cadence that competitors cannot match: Starlink broadband, satellite-to-mobile, future orbital AI compute, lunar logistics, and eventually deep-space architectures.

This reframes the role of launch. The winning model is not necessarily to sell launch services at the lowest price per kg. It is to use launch as a controlled internal capability that compounds advantages across connectivity, data, compute, defense, and orbital infrastructure. As a result, standalone launch providers face a narrower commercial market than the industry expected during the cubesat era. The more SpaceX uses incremental launch capacity for its own businesses, the less the open market should be treated as the primary demand signal for heavy launch.

The open launch market is migrating toward intermediate and sovereign demand

Outside vertically integrated mega-constellations, the open launch market is moving away from micro-launch and toward intermediate vehicles. The original small-launch thesis depended on a large, recurring market of small, frequent, low-mass commercial payloads. That market has not materialized at the expected scale. Satellite architectures are getting larger as customers demand more power, onboard compute, sensor capability, mission duration, and operational flexibility. At the same time, SpaceX’s rideshare pricing structure makes very small payloads increasingly unattractive on a standalone basis.

The structurally viable opening is therefore not sub-300 kg micro-launch. It is the intermediate segment: vehicles capable of serving sovereign constellations, dedicated orbital planes, government missions, responsive launch, and mid-sized commercial architectures that cannot be efficiently addressed by generic rideshare or by Starship-class capacity. This market remains smaller than the heavy-launch opportunity, but it is more defensible for non-SpaceX players. It is where flexibility, orbital specificity, national control, and defense adjacency matter more than lowest cost per kg.

Defense and tactical space will define the investable edge of the launch ecosystem

For small launch and propulsion companies, defense is no longer a secondary option. It is becoming the most attractive growth vector. Vehicles below one metric ton are increasingly mapped to air defense, target vehicles, interceptor testing, and threat-representative systems. Vehicles in the one-to-five-tonne range are better positioned for hypersonic testing and related flight-test infrastructure. Intermediate launchers can support both commercial and defense use cases, combining sovereign constellation deployment, responsive launch, tactical space operations, and orbital mobility.

The most compelling opportunity extends beyond responsive launch. It is rapid regeneration of orbital capacity: restoring, augmenting, repositioning, or defending space-based capabilities under compressed timelines. That requires more than a rocket. It requires an integrated stack of launch, satellite manufacturing, mission operations, ground systems, and defense customer access.

For investors, the implication is clear: the next winners will not be companies that optimize only for cheaper launch. They will be companies that control scarce capability stacks — launch capacity, satellite capability, propulsion, mission operations, defense relevance, and sovereign access. The market is moving away from launch as transportation and toward launch as strategic infrastructure.