Monopoly (6/9/23)

Good morning. Happy Friday, and welcome aboard to the 196 of you who have joined us since last week. We’re happy to have you.

In today's edition...
🎩 Thoughts on a SpaceX monopoly
🛰️ Firefly acquires Spaceflight Inc.
💫 Payload’s picks

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Analysis: A SpaceX Monopoly? Not So Fast

Ed. note: This analysis was authored by Mo Islam, Payload’s cofounder and a former Wall Street analyst. It is not based on any internal company data.

SpaceX may have an effective monopoly over the launch supply today, but Mo predicts it will not be the sole winner of the launch market for a variety of reasons.

A full dance card: Smaller satellite operators are struggling to get on SpaceX's packed launch schedule. A brief glance at SpaceX's rideshare booking system reveals no upcoming flights to LEO this year or next. The next available rideshare flight to SSO is not scheduled until February 2025. While the website might not show the most recent data, the findings corroborate anecdotal evidence from potential customers.

Elon’s bottom line: SpaceX has reached the upper bound of meaningful cost improvements possible from the Falcon 9. Consequently, the cost per kg is not expected to see significant changes in the future. Unless Falcon 9 can substantially increase its capacity for rideshare missions, a gap will persist for companies seeking to launch small-to-medium payloads into space.

Rideshare missions are also less profitable, giving SpaceX little reason to prioritize these types of launches. Absent an increased cadence, operators will have to weigh whether the 40-50% lower cost per kg with SpaceX is worth the scheduling woes.

The Starship in the room: SpaceX will inevitably pivot most of its resources toward Starship and beyond-Earth applications, at the expense of Falcon 9. While Starship holds great potential for launching satellite constellations and large-scale space infrastructure, it’s unlikely to facilitate dedicated rideshare missions for small satellites in the near future. Most estimates predict the first commercial launch won't happen for another 3-5 years, offering a real opportunity for a new player to capture market share.

Uncle Sam’s say: The US government will never want to be beholden to one launch company, and it will invariably require multiple reliable options, even if it means paying a premium. Exhibit A: United Launch Alliance. Outside of the US, it’s worth noting that foreign governments will also not want to rely on SpaceX, demonstrating an additional investment case since foreign countries will likely rely on domestic launch providers for national security missions.

Did you enjoy this excerpt? Readers who referred at least one person to Payload got exclusive access on Friday to the full article on the launch market in Mo’s monthly Secret Newsletter. Scroll down to find your personalized referral link, and be sure to share it to get access to the archives and future editions!

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Firefly Buys Spaceflight Inc.

Launch startup Firefly Aerospace announced yesterday that it has acquired Spaceflight Inc., a space services and transportation company, to build its on-orbit service offerings.

Firefly did not disclose the terms of the deal.

Firefly: The Texas-based rocket startup, which focuses on the small to medium-lift market, achieved orbit for the first time in October with its Alpha launch vehicle. Firefly aspires to be a one stop shop for space transportation, offering launch services and in-orbit transportation to bring payloads to specific orbits.

Spaceflight Inc.: The space services company organizes launch rideshares, having completed over 460 successful payload deployments, and operates orbital transfer vehicles capable of last-mile satellite deliveries.

• The Spaceflight acquisition provides Firefly with further mission management expertise while expanding its product suite to offer an end-to-end service for satellite customers.

“The combination of Spaceflight’s on-orbit experience with Firefly’s launch vehicles, Blue Ghost landers, and Space Utility Vehicles is an overnight game changer for our customers and investors,” said Firefly chief Bill Weber.

Recent tug consolidation: Earlier this year, Launcher, a space tug competitor, merged with commercial space station company Vast, citing the benefits of a well-capitalized single-parent investor. Orbital transfer vehicle startups are capital-intensive businesses that compete in an increasingly crowded market. Nonetheless, they remain integral to the space transportation value chain.

See You Wednesday!

The commercial earth observation (EO) market we know today was born from defense. Space-based EO data provides the analysts and the war fighters with an information advantage. Now, commercial companies are at the forefront of defense applications.

Geopolitical analysts tie together multiple data sets to see action in their domain and make strategic decisions. This webinar will dive into how multiple data modalities - RF, SAR, imagery, & hyperspectral - impact defense use cases. We will also dive into usability. Many defense clients simply use raw data. But for others, and increasingly for the commercial market, we need to ask: how can we make EO data more usable from a platform, analytics, and service model perspective?

In Other News

• Planet ($PL) shares dropped more than 15% in post-close trading after the company lowered its revenue projections for the year in its Q1 reporting.

• More than a dozen people were laid off from Ursa Major, TechCrunch reported.

• The House Oversight Committee will hold a UAP hearing to probe unconfirmed whistleblower claims that the US government is harboring extraterrestrial spacecrafts.

• Space Force awarded 12 new national security payload missions split evenly between ULA and SpaceX. The launches are slated to begin in 2025.

• It can take at least three years to recover from the brain damage caused by spaceflight, researchers found.

The View from DC

Three Crew-5 astronauts—NASA’s Josh Cassada and Nicole Mann, plus JAXA’s Koichi Wakata—visited the nation’s capital this week, including a stop by NASA HQ.