Rocket Lab
DraftFounded in New Zealand in 2006 and now headquartered in the United States. It is the clearest example of a company that built a successful small launch vehicle and then concluded that launch alone was not the business.
- Founded
- 2006
- Vehicles
- Electron small launcher; Neutron in development
- Launch sites
- Mahia Peninsula in New Zealand; Wallops Island in Virginia
- Other lines
- Photon spacecraft bus, components, and space systems
Electron
| Property | Value |
|---|---|
| Payload to LEO | ~300 kg |
| Propellant | Kerolox |
| Engines | Nine Rutherford on the first stage, one vacuum Rutherford on the second |
| Cycle | Electric pump-fed |
| Structure | Carbon composite |
| Manufacturing | Extensive 3D printing of engine components |
Rutherford is the first electric pump-fed engine to reach orbit, and the choice is instructive. Rather than a turbine driven by hot gas, battery-powered electric motors drive the propellant pumps. This removes the hardest part of engine development, the turbomachinery and its gas generation, at the cost of carrying batteries that are dead weight once discharged. See Engine cycles.
The trade only closes for a small vehicle with short burn times, which is exactly Electron’s case. Battery packs are jettisoned in flight as they deplete.
The Mahia launch site is a genuine asset. Its location gives access to a wide range of azimuths with very permissive overflight, which is unusual and allows inclinations that are difficult from most sites.
The small launch problem
Electron works technically and operates in a market that has been compressed from underneath.
Rideshare programmes flying dozens of smallsats at a time offer roughly 20 000 to $50 000 for dedicated small launch. Several competitors have exited the market as a result.
What dedicated small launch still sells is control: a specific orbit, a specific date, and no dependence on a primary payload’s schedule. Rocket Lab has consistently positioned on this rather than competing on price, and the customers who value it are constellation operators replacing satellites in specific planes and government customers with schedule requirements. See Launch vehicles.
Recovery of the Electron first stage has been pursued, including attempts to catch a parachuting booster by helicopter, later abandoned in favour of water recovery. The economics of reuse on a vehicle this small are marginal for the reasons in Reusable launch systems: the fixed recovery cost is spread over a small vehicle value.
Neutron
A medium-lift reusable vehicle in development, targeting roughly 13 t to LEO in reusable configuration.
The strategic logic is direct: the medium-lift segment is where the constellation deployment market is, and a small launcher cannot serve it. Neutron is a bid to move from a niche the company leads into the segment where the volume is.
Design choices include methalox propellant, a captive fairing that opens and remains attached rather than being jettisoned, and return to the launch site.
Photon and space systems
The more consequential strategic move has been away from launch.
Photon is a spacecraft bus derived from Electron’s kick stage, sold as a platform rather than as a launch service. It has flown interplanetary: CAPSTONE was delivered to a lunar trajectory by a Photon, described in CubeSats and small satellites.
Space systems covers components and subsystems sold to other manufacturers: solar arrays, separation systems, reaction wheels, star trackers, radios and composite structures, several acquired through acquisition of established suppliers.
This segment has grown to represent a majority of the company’s revenue, which is the point. As noted in Commercial providers, components and subsystems are less capital intensive and more consistently profitable than launch, and the company’s trajectory reflects that.
The lesson
Rocket Lab’s history is a useful case study in the economics described in Startups and venture capital.
It built a technically successful small launcher, established a reliable flight record, and found that the segment was structurally compressed by rideshare. Its response was to diversify into higher-margin, lower-capital segments while developing a larger vehicle for the segment with actual volume.
That is a rational response and it is also an admission that small dedicated launch, the thesis on which the company was founded, is not by itself a large business.
References
- Rocket Lab Electron Payload User’s Guide.
- Rocket Lab public financial filings, which show the revenue split between launch and space systems.
- FAA Office of Commercial Space Transportation launch records.
- Cheetham, B. “CAPSTONE”, ASCEND 2021, for the Photon interplanetary application.