Stoke Space announced a massive capital raise on Wednesday that might seem, at first glance, like just another bet on the commercial launch market. The details tell a different story.
Led by billionaire Thomas Tull’s U.S. Innovative Technology (USIT), a fund that explicitly invests in technologies tied to national security, the $510 million Series D round underscores a larger shift in the launch industry. The old assumption was the winners of launch would be the companies that capture the lion’s share of commercial payloads.
While there is still demand on the commercial side from private constellation developers and for emerging use cases like in-space manufacturing or lunar payloads, the center of gravity has shifted decisively toward defense.
Just a few years ago, space startups were selling investors on visions of a rapidly expanding commercial market for weather monitoring, broadband, and remote-sensing satellites. Astra, for example, told investors in its 2021 SPAC deck that it would eventually launch hundreds of rockets per year to serve a growing small satellite market. Relativity Space pitched investors on a 3D printing revolution that would make rockets cheap enough to unlock large commercial demand.
But there are only so many commercial payloads to fly, and only one company — SpaceX — has managed to consistently launch them cheaply and reliably.
Defense, meanwhile, is on an opposite trajectory.
Geopolitical shifts, like Russia’s war against Ukraine and growing competition in space from China, have created new tailwinds. The Pentagon’s new “Golden Dome” initiative, a multibillion-dollar project aimed at creating a layered missile defense shield over the continental United States, has flooded the aerospace ecosystem with lucrative new opportunities.
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Meanwhile, programs like …