Investing in space: Why military contracts are crucial for space companies

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As Americans celebrate their Independence Day this week, I am reminded of the intrinsic, but perhaps little-understood, connection between space and U.S. national security.

I feel like, outside of the industry, when most people hear “space” or think of “space investing,” it comes with connotations of science, exploration, astronauts, and maybe a few Hollywood-corrupted visuals of alternative space shuttles.

But the reality is that space has been what the Pentagon calls a “warfighting domain” since the very beginning. The first orbital rockets, the first satellites, and even the Apollo architecture were born out of the military and its aerospace contractors. The U.S. Space Force, which has existed for less than five years, already has an annual budget larger than NASA’s. even though the latter is old enough to be the grandfather of the Space Force and holds a coveted position as one of the most valued federal agencies.

Even within NASA’s corps, you’re as likely to find “logged combat flight hours” on astronaut resumes as anything else.

Historically, the biggest defense contractors have been the winners of the biggest space contracts — and that remains true today. SpaceX has earned a coveted spot in that role for the military, whether it’s launching rockets for the Space Force or building satellites for the NRO.

The largest pure-play space companies derive a significant, if not majority, portion of their revenue from military contracts with the United States and its allies. And often, those military space contracts represent moments when the companies have succeeded—a point Rocket Laboratory CEO Peter Beck made this statement to me earlier this year when his company was awarded a spot in the $10 billion PWSA competition.

“This is truly our foray into the world of leading (defense) roles…it’s virtually doubling the company’s order book overnight with one contract,” Beck told me at the time.

The importance of military contracts is also being felt further upstream, as venture capital is taking a more explicit interest in startups that win and deliver on early military contracts.

Global conflicts such as Russia’s invasion of Ukraine or growing tensions between China and Taiwan further underscore the importance of space capabilities to militaries around the world, both the United States and its adversaries.

As you eat hot dogs tomorrow and look up at the sky for your local fireworks display, it’s helpful to recognize why what’s above is so important to the military than what’s down here — and that includes seemingly unrelated parts of space, like private space stations or returning to the moon.

Happy 4th of July!

• NASA and Boeing delay Starliner’s return by ‘several weeks’ to conduct further thruster testing, The agency and company said they have not yet set a new deadline and plan to wait until after a campaign of testing the spacecraft’s thruster technology at White Sands, New Mexico. – CNBC
• SpaceX and NASA misjudged the risk of space debris hitting the groundas numerous incidents of debris surviving reentry underscore the need to reexamine the question of the “survivability” of spacecraft parts. – Ars Technica
• Chinese company accidentally launches Falcon 9-sized rocket during test: Space Pioneer was conducting a static firing test of its Tianlong-3 rocket’s booster, but the booster unexpectedly released and flew for about a minute before crashing to the ground in a fireball. – SpaceNews
• SpaceX to Use Dragon-Based Design for US Deorbit Vehicleaccording to a NASA official who said the company will have to make “some modifications and some changes to the trunk” of the spacecraft to guide the ISS through reentry. – Read more
• Japanese Billionaire Yusaku Maezawa’s Cancelled Starship Contract Was Worth $500 Millionbut Maezawa reportedly did not pay the full amount before canceling the dearMoon lunar trip. – The Information
• Amazon Kuiper commercial launch postponed to fourth quarterafter previously targeting the first half of this year. – Via Satellite
• Europe lags far behind US in venture capital funding for space startups, report findsand a survey by the EU lending body found that venture capitalists in the region have a negative view of fundraising. – SpaceNews
• Mars simulator crew to leave habitat after more than a yearleaving the confines of their environment at NASA’s Johnson Center in Houston after 378 days. – NASA
• Former cryptocurrency group SERA plans reality TV contest to win spots on Blue Origin space flight:The Space Exploration and Research Agency (SERA), formerly known as the Crypto Space Agency, has purchased a future New Shepard flight and will hold a public competition for the six seats, the group announced. – Space.com

• SpaceX wins $69 million contract from NASA to launch COSI telescope in August 2027 on a Falcon 9 rocket. COSI (Compton Spectrometer and Imager) is a wide-field gamma-ray telescope. – NASA
• Space Force adds Blue Origin and Stoke to the OSP-4 launch programmanaged by Space Systems Command (SSC). OSP-4 brings together a wide variety of rocket companies that bid on experimental mission or small payload contracts. – Space Force
• Spanish rocket company PLD Space offers free satellite flights on its first two launches under the company’s MIURA 5 Spark program. The company said organizations with small satellites can submit bids to launch the two MIURA 5 rocket demonstration flights in 2025 and 2026, with “standard launch services at no cost.” – PLD Space

• Virgin Galactic regains compliance with NYSE listing after the company completed a 1-for-20 reverse stock split last month. – Virgin Galactic
• Moments Board members loan company $500,000the six directors having jointly issued secured bonds which are to be “used primarily for the payment of earned employee retention bonuses.” – Momentus
• Malfunction of German spy satellites built by OHB:Two OHB satellites in the SARah network failed to deploy their antennas, with the German military saying the company would be responsible for building two replacements. – Ars Technica

• Michael Pavloff Joins Aerospacelab as Deputy Technical Directorjoining the company from Terran Orbital where he was Vice President of Technology. – Aerospacelab
• Lee Levy joins advisory board of space mining startup Lunasonde, a retired Air Force general who also served on NASA’s advisory board. – Lunasonde
• NASA Names Andre Douglas as Artemis II Backup Astronauta role he will fill if one of the agency’s three core crew members is unable to fly. Douglas completed the astronaut training program in March. – NASA

• July 4: Firefly Alpha launches NASA’s VCLS demonstration mission from California.
• July 7: SpaceX Falcon 9 launches Starlink satellites from California.
• July 7: Launch of the Turksat 6A satellite by SpaceX’s Falcon 9 from Florida.
• July 9: Arianespace launches its inaugural flight from French Guiana.
• July 10: NASA Starliner astronauts to hold press conference in space of the International Space Station.