On Wednesday, Stoke Space revealed a significant fundraising round that, at first glance, might appear to be another wager on the commercial space launch sector. However, a closer look reveals a different narrative.
The $510 million Series D round, spearheaded by billionaire Thomas Tull’s U.S. Innovative Technology (USIT)—a fund focused on investments in technologies crucial to national security—highlights a broader transformation within the launch industry. Previously, it was assumed that the most successful launch companies would be those dominating the commercial payload market.
Although private satellite network builders and new applications such as in-space manufacturing or lunar missions still drive some commercial demand, the primary focus has unmistakably shifted toward defense.
Not long ago, space startups were pitching investors on the promise of a booming commercial market for satellites used in weather tracking, broadband, and remote sensing. Astra, for instance, projected in its 2021 SPAC presentation that it would eventually launch hundreds of rockets annually to serve the expanding small satellite sector. Relativity Space promoted a vision of revolutionizing rocket production through 3D printing, aiming to make launches affordable enough to unlock substantial commercial interest.
Yet, the number of commercial payloads is limited, and so far, only SpaceX has consistently provided low-cost, reliable launches for them.
In contrast, defense-related demand is rapidly increasing.
Global events, such as Russia’s invasion of Ukraine and intensifying space competition with China, have generated new momentum. The Pentagon’s ambitious “Golden Dome” project—a multibillion-dollar effort to establish a layered missile defense system over the U.S.—has injected the aerospace sector with a wealth of lucrative opportunities.
Additionally, initiatives like the Space Force’s National Security Space Launch (NSSL) and the Space Development Agency’s missile-defense satellite network are offering years of stable, high-value contracts.
Launch startups have taken notice. Their messaging, funding sources, and business strategies have increasingly oriented around a single primary customer: the U.S. government.
Stoke Space acknowledged this shift in a press release, stating that the new capital would enhance “capability across the U.S. space industrial base.” The involvement of new backers such as Washington Harbour Partners LP and General Innovation Capital Partners further highlights “Stoke’s importance to national security and the U.S. industrial base,” according to the company.
Stoke’s recent achievements reflect this trend. In March, the company was among a select group chosen for the NSSL Phase 3 Lane 1 program, granting it the opportunity to compete for up to $5.6 billion in launch contracts over the next ten years.
Other recent transactions reinforce this perspective. Firefly’s $855 million purchase of SciTec was described by CEO Jason Kim as a move to strengthen the company’s “capacity to support a growing number of defense missions.” Meanwhile, Relativity’s new owner, former Google CEO Eric Schmidt, recently cautioned lawmakers that if China were to achieve superintelligence first, “it would alter the global balance of power in ways we cannot foresee, predict, or manage.”
Although his comments were not specifically about launch services, they capture the prevailing attitude in the space sector: the U.S. must maintain its lead in critical areas like space and artificial intelligence.
Given this backdrop, USIT’s leadership in the latest funding round is unsurprising. Thomas Tull established the fund in 2023 to back technologies “relevant to the national interest.”
Previous investments by the fund span a range of areas tied to national resilience, including defense startup Shield AI and Gecko Robotics. Stoke’s addition to this portfolio solidifies the reality that space investment now sits squarely at the intersection of venture capital and defense spending.
