Allies fund domestic rocket startups to secure independent space access

Allies fund domestic rocket startups

Several United States allies are pouring billions of dollars into domestic space launch startups to secure independent access to orbit. Australia, Canada, Germany, and Spain have all approved substantial government funding for commercial space firms to end their total reliance on American and Chinese rockets.

These nations now view sovereign launch capability as a national security imperative rather than a luxury. While SpaceX remains the dominant global provider, these middle powers want to ensure they can launch sensitive military and government hardware without relying on foreign entities. Political shifts in the U.S. and the close relationship between Elon Musk and the American government have accelerated these efforts.

Most commercial satellite companies still choose the cheapest, most reliable path to space, which usually means SpaceX. However, a growing captive market for government-backed projects is creating a niche for domestic rockets. The Verge has tracked the funding and progress of these emerging space powers as they attempt to join the elite club of launching nations.

Germany leads the European surge

Germany is currently the most aggressive investor in independent launch technology among U.S. allies. The German government announced $41 billion in total space spending over the next five years to protect its digital infrastructure. Defense Minister Boris Pistorius described satellite networks as the "Achilles’ heel" of modern society during the funding announcement.

In late 2024, the German federal government allocated $110 million to three domestic startups: Isar Aerospace, Rocket Factory Augsburg (RFA), and HyImpulse. Isar Aerospace currently leads the European pack with approximately $650 million in total private and public investment. The company is readying its Spectrum rocket for a second test flight from Norway as soon as next month.

Germany also serves as the primary financier for the European Space Agency’s (ESA) European Launcher Challenge. This program funnels $1.1 billion into multiple rocket startups to foster competition within the continent. Germany provides 40 percent of that budget, ensuring its domestic firms like Isar and RFA receive the bulk of the support.

Spain and Italy buy independence

Spain has emerged as the second-largest contributor to the ESA launcher program, committing $200 million to support PLD Space. The company is developing the Miura 5, a small satellite launcher scheduled for demonstration flights later this year. Spanish Science Minister Diana Morant stated that the government aims to make its domestic launcher a permanent fixture in the European flight manifest.

The Spanish government also provided $47 million directly to PLD Space through its PERTE Aerospace initiative. This funding more than doubles the $140 million the company raised from private investors in 2024. Spain views these investments as essential for maintaining a "European and Spanish brand" in the global launch market.

Italy is following a similar path by backing its established aerospace champion, Avio. The Italian government committed more than $300 million in 2023 to help Avio develop new methane-based propulsion systems. Avio already builds the Vega rocket, giving Italy a significant head start over its neighbors who are still building their first orbital prototypes.

British and Canadian launch goals

The United Kingdom’s space ambitions recently hit a major snag with the collapse of Orbex. The Scottish launch company entered insolvency proceedings last week despite raising $175 million from public and private sources. Fellow Scottish startup Skyrora is now reportedly interested in purchasing Orbex’s assets and its private spaceport land.

Despite the Orbex failure, the UK government still committed $170 million to the ESA European Launcher Challenge in November. British officials left nearly 80 percent of that funding unallocated, likely waiting to see which domestic startup survives the current market contraction. The UK currently lacks a domestic orbital launch capability and remains reliant on SpaceX and Ariane 6.

Canada joined the race in late 2023 with a $130 million investment initiative for sovereign launch capability. The Canadian government wants to launch "light lift" rockets from Canadian soil by 2028. Startups like Maritime Launch Services and NordSpace are competing for these grants, though none have attempted an orbital flight yet.

Australia and Brazil seek orbit

Australia is banking on a single company, Gilmour Space, to reach orbit. The firm raised more than $300 million last month, including a $50 million investment from the Australian government’s National Reconstruction Fund Corporation. Gilmour Space is currently scaling its manufacturing and expanding its spaceport in Queensland following a test flight in July.

Brazil has struggled for decades to develop an independent rocket, often with tragic results. A 2003 explosion of the VLS-1 rocket killed 21 technicians and stalled the program for years. The government is now trying to pivot toward a smaller "microlauncher" known as the MLBR, backed by approximately $40 million in public financing.

The global landscape of space access is currently divided between established powers and those attempting to build domestic capacity. The following nations currently possess active, homegrown orbital launch capabilities:

• The United States (SpaceX, ULA, Rocket Lab)
• China (CASC and various private startups)
• Russia (Roscosmos)
• India (ISRO)
• Japan (JAXA)
• France (ArianeGroup via ESA)
• Italy (Avio via ESA)
• Israel, Iran, North Korea, and South Korea

Economic hurdles for emerging powers

Taiwan is slowly increasing its space budget, though it remains focused primarily on satellite manufacturing. The Taiwan Space Agency operates on a modest $200 million annual budget and recently set a goal for an orbital launch by 2034. It plans to begin flight testing a rocket capable of hauling 440 pounds to low-Earth orbit by 2029.

Argentina’s Tronador II project remains stalled due to the country’s severe economic crisis. While the government pledged 14 billion pesos to the project in 2022, currency devaluation has gutted the actual value of that investment. Under President Javier Milei, spending on technology research has faced significant cuts, leaving the liquid-fueled rocket project in limbo.

Other nations like the United Arab Emirates, Indonesia, and Turkey have expressed interest in domestic launch, but firm financial commitments remain scarce. For most of these countries, the transition from "aspiring space power" to "launching nation" depends on whether their domestic startups can survive the high costs of flight testing. While government money is flowing, the technical challenge of reaching orbit remains the primary barrier to entry.