Stoke Space announced a major funding round Wednesday, but at first glance it may seem like just another bet on the commercial launch market. The details are another story.
The $510 million Series D round, led by billionaire Thomas Tull’s US Innovative Technology (USIT), a fund that invests explicitly in technologies related to national security, highlights a major shift in the launch industry. The assumption so far was that the winner of the launch would be the company that captured the bulk of the commercial payload.
While there is still commercial demand from civilian constellation developers and emerging use cases such as space manufacturing and lunar payloads, the center of gravity has shifted decisively toward defense.
Just a few years ago, space startups were selling investors a vision for rapidly expanding commercial markets such as weather monitoring, broadband and remote-sensing satellites. Astra, for example, told investors in its 2021 SPAC materials that it plans to eventually launch hundreds of rockets a year to serve the growing small satellite market. Relativity Space has pitched to investors a 3D printing revolution that could make rockets cheaper and tap into large-scale commercial demand.
However, the number of commercial payloads that can be flown is limited, and only one company, SpaceX, has successfully launched them cheaply and reliably.
The defense, on the other hand, is on the opposite trajectory.
Geopolitical changes such as Russia’s war with Ukraine and the escalating space race with China are creating new tailwinds. The Pentagon’s new Golden Dome initiative, a multibillion-dollar project aimed at building a multi-layered missile defense shield over the continental United States, has created a lucrative new opportunity for the aerospace ecosystem.
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Meanwhile, programs like the Space Force’s National Security Space Launch (NSSL) and the Space Development Agency’s missile defense satellite constellation promise predictable, high-priced contracts for years.
Launching startups are aware. Their language, investors, and business models are being recalibrated toward a single buyer: the U.S. government.
Stoke Space nods to this reality in a press release, saying the new funding will strengthen “the capabilities of the entire U.S. space industrial base.” Support from other new investors such as Washington Harbor Partners and General Innovation Capital Partners further emphasizes “Stoke’s importance to national security and America’s industrial base,” the company said.
Stoke’s recent win highlights this reality. In March, the company was one of the few launch providers selected for the NSSL Phase 3 Lane 1 program. The program allows the company to compete for up to $5.6 billion in launch contracts over the next 10 years.
Other recent deals tell a similar story. Firefly’s recent $855 million acquisition of SciTec was framed by CEO Jason Kim as a move to strengthen the company’s “capabilities to support a growing number of defense missions.” Eric Schmidt, Relativity’s new owner and former Google CEO, recently warned lawmakers that if China achieves superintelligence first, it will “change the global balance of power in ways we have no way of understanding, predicting, or dealing with.”
Although his remarks were not specifically about launches, they encapsulated the broader sentiment across the space industry: “The United States cannot afford to lose in strategic areas like space and AI.”
In that context, USIT has a clear lead in the new round. Thomas Tull launched the fund in 2023 to fund technologies “relevant to national interest.”
His past investments are diverse but related to homeland resilience, including defense startups Shield AI and Gecko Robotics. Stoke’s inclusion in that portfolio cements the new reality that space investing is at the intersection of venture capital and defense budgets.
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