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Is This Private Space Company the Next SpaceX?

Motley Fool - Sat Nov 18, 2023

Several months ago, I had the opportunity to chat with Bill Weber, CEO of privately owned space company Firefly Aerospace, about the company's several space projects. These range from building rockets with Northrop Grumman, to designing "space tugs" to repair satellites in orbit, to preparing to launch a new satellite for the U.S. Space Force. At the time, Firefly Aerospace numbered among probably a dozen or more small space start-ups still working to achieve a fully successful launch to orbit.

Today, Firefly Aerospace is part of an even smaller club of space companies -- the ones that have succeeded in reaching orbit. To discuss this accomplishment, I spoke with Weber again last month.

Neon blue 2023 with a rocket coming out of the

Image source: Getty Images.

Victus Nox: "Conquer the night"

Much was riding on Firefly's Victus Nox mission for Space Force. Heading into the launch, Firefly had already tried to put satellites in orbit twice previously -- and only been partially successful once. (The satellites reached orbit, but didn't stay there.) The hope, therefore, was that the third time would be the charm.

Adding to the pressure, Victus Nox was what Space Force calls a "tactically responsive launch" mission. Meaning Space Force would give Firefly a payload to prepare for launch ahead of time, and a general idea of where it wanted the payload placed in orbit. But the company would have to encapsulate the payload, mount it on a rocket, finalize all launch preparations, and launch the payload to orbit all with just 24 hours' notice.

And yet, on Sept. 14, 2023, Firefly did all of this, meeting the tight deadline and launching its first 100% successful rocket mission. In so doing, it joined an elite club of only a very few space companies -- names like Boeing, Lockheed Martin, Northrop Grumman, Rocket Lab, and SpaceX -- that have put satellites in orbit on their own rockets.

Mission accomplished. Now, what's next for Firefly?

What's next for Firefly Aerospace?

Already, Firefly is preparing for its next Alpha rocket launch -- its fourth attempt -- expected before the end of this year. The company is settling into a launch cadence of approximately four launches per year, or once per quarter, throughout 2024.

Weber notes that the company's customer mix is currently about 50-50 commercial and government. Firefly is also starting to see interest in its Alpha rocket, which at a 1-ton-plus payload to low Earth orbit is one of the biggest "small" rockets, from customers in Europe. At a $15 million launch price, Alpha can put 3 times the payload of a Rocket Lab Electron rocket in orbit, for only twice the price.

Farther out, Firefly continues to help Northrop build even larger rockets, namely the Antares 330, and the medium launch vehicle, or MLV. Both of these rockets are scheduled to fly in 2025.

Firefly jumps over the moon

At the same time, Firefly targets a third-quarter 2024 launch date for its Blue Ghost moon lander, which will carry payloads to the moon under a $93 million NASA Commercial Lunar Payload Services (CLPS) contract. Assuming this goes well, Firefly has a second CLPS mission lined up for 2026.

Now, Blue Ghost masses 2.7 tons, making it too big for Alpha to carry. Plus, the first moon mission will take place before either Antares 330 or MLV are ready to fly. So Firefly will make its first moon trip with help from rival space company SpaceX, which will provide a Falcon 9 for the purpose.

Tugs in space

Last but not least, I was able to discuss with Weber the prospects for Firefly's newest business, in-orbit services -- or more colloquially, "space tugs."

When last we spoke, Firefly had just bought private space company Spaceflight Inc., and was pondering what to do with the latter's Sherpa space tug concept.

Merging its own Space Utility Vehicle concept with Spaceflight's Sherpa, Firefly is developing a fleet of Dawn, Dusk, and Dark Elytra space tugs to do everything from towing to refueling to repairing other companies' satellites in Earth orbit.

As Weber confided, Firefly is taking a conservative approach here. Rather than assuming that "if you build it they -- customers -- will come," says Weber, Firefly will offer to provide the service, then sign a contract, and outfit the Elytra to perform the relevant work. This seems reasonable. It will keep Firefly from investing in capabilities that might not find buyers, while still opening up the potential for new revenue streams.

Firefly plans its first Elytra launch for next year, with the mission of carrying an Xtenti satellite dispenser to multiple orbits in order to dispense a number of U.S. government satellites. So to be clear, Firefly will make both the rocket platform and the space tug for the mission, leaving the rest to Xtenti.

How big of a market might this be? And more to the point, is it big enough to support Firefly and Northrop Grumman and Rocket Lab, too -- which are also building in-orbit services businesses?

When I first looked into this, my assumption was that only large, expensive satellites in geosynchronous orbit could justify additional spending on in-space services -- and thus limit the market size. Weber pointed out, however, that with 6,700 active satellites in orbit at the end of 2022, 3,500 inactive satellites in orbit beside them, and innumerable pieces of space junk in orbit besides, space tugs such as Elytra can keep pretty busy simply deorbiting satellites to clean up near-Earth orbit.

That's 10,000 potential deorbit customers for space tug services right there, in addition to all the other services space tugs like Elytra might perform. Looked at that way, yeah, I'd say this market is big enough for at least three companies to service it -- and for Firefly to make a reasonable argument that it could become the next SpaceX.

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Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Lockheed Martin and Rocket Lab USA. The Motley Fool has a disclosure policy.

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