14 months ago, SpaceX changed the face of space travel.
Announcing the creation of a new Smallsat Rideshare program, SpaceX promised to offer “regularly scheduled, dedicated Falcon 9 rideshare missions” for space for satellites “up to 150 kg” at prices “as low as $ 2.25 million per Mission “- or less than $ 15,000 per. Kg.
Just a month later, SpaceX expanded and simplified the program by adding the ability to connect ad hoc rides aboard its own Starlink satellite launches for as little as $ 1 million or $ 5,000 per year. Kg.
So how are SpaceX’s plans designed?
To the moon, Alice! (Or at least to pave)
Pretty good, actually. SpaceX’s first Starlink / Rideshare launched into orbit in June 2020 and carried a trio of Earth observation satellites to the US company Planet with several additional rideshares announced since. And as we just learned from our friends at SpaceNews.com, the new SpaceX service is also starting to become popular internationally.
Last week, German launch aggregator Exolaunch announced it had signed an agreement to place at least 30 third-party satellites aboard SpaceX rideshare missions in December 2020 and to launch dozens more satellites by mid-2021.
SpaceX is not the only company offering rideshare services. Sometimes a competitor, sometimes a partner, has Spaceflight Inc., which is now owned by the Japanese conglomerate Mitsui & Co. and the industrial machine manufacturer Yamasa Co., collected customer orders for rocket launches and bought rideshare space on other companies’ rockets (SpaceX) rockets included) for years. But now it seems that Spaceflight Inc. gets some competition in Europe from a homemade rival – and SpaceX has found another partner.
As Exolaunch’s Vice President of Launch Services Jeanne Medvedeva explained in a statement: “The SpaceX program is a game changer for the rideshare launch industry, giving new impetus to several constellations of small satellites,” which are both “cost effective” and “reliable.”
This record of reliability (SpaceX has not suffered a single launch accident in more than four years) when combined with the ultra low prices charged by SpaceX seems to be growing the market for accompanying rideshare launches far beyond US borders. According to the SpaceNews story, Exolaunch’s customers come on these rideshare missions from around the world – including Canada, France, Germany, Lithuania and the UK.
What it means for investors
So bullying for Exolaunch – but Exolaunch does not trade on US stock exchanges. Exolaunch is not a listed company at all, so why is any of this important to investors?
First and foremost, Exolaunch’s access to the rideshare market, in collaboration with SpaceX, means that the latter’s rideshare business is gaining momentum. It’s becoming more popular, and part of the popularity one imagines is due to the extremely low prices that SpaceX is able to charge – as little as $ 1 million to launch a 200kg satellite versus the ca. The $ 6 million privately held Rocket Lab charges e.g. the $ 12 million that Virgin Orbit is said to be asking for.
In my opinion, this poses a risk to the business models of both Rocket Lab and Virgin Orbit – all the more so because both of these companies are based outside the US, right in the markets that Exolaunch targets. When one or both of these companies go public, their potential market size may be greatly diminished.
And second, because SpaceX piggybacks most of these rideshare missions on launches of its own Starlink satellites, every paying customer who rides a tour helps cover the cost of building SpaceX’s Starlink broadband satellite service a little more. Each rideshare makes building Starlink a little cheaper and a little more profitable.
When SpaceX finally comes to IPO’ing Starlink – as it has said it intends to do – it could be even more valuable than it already looks.