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SpaceX's First Rideshare Customer Means Competition for Northrop

Three months ago, SpaceX shook up the market for small satellites -- and the small rockets that launch them -- by offering to bundle small satellites on dedicated rocket rides aboard its big Falcon 9 rocket. As the plan took shape, the threat from SpaceX loomed even greater for competing launch companies, with SpaceX offering monthly rocket rides to space alongside regularly scheduled launches of the company's Starlink internet satellites.

Combined, the two announcements pose a potentially mortal threat to the nascent market for other "small launch" providers -- and it turns out SpaceX's plan could shake up the space market in more ways than one.

Artist's conception of Momentus space tug Ardoride

Image source: Momentus.

Space tugs and space tow trucks

Northrop Grumman (NYSE: NOC) has recently unveiled a plan to extend the lifespan of satellites in space. Using a Mission Extension Vehicle launched last month -- essentially a "space tug" or "space tow truck" -- Northrop is offering to relocate, refuel, and refurbish other companies' satellites while they are still in orbit. Successful refurbishment of a satellite "up there" will mean that satellite communications companies can delay building and launching new replacement satellites from "down here" -- potentially saving Northrop's customers millions, or even billions of dollars in manufacturing and launch costs.

And with NASA having rejected a Lockheed Martin attempt to get it to pay for a competing service, and Maxar Technologies having pulled out of a contract to develop yet another space tug, Northrop currently has this market all to itself -- but perhaps not for long.

Did someone call a taxi?

Why not? Because just days after SpaceX announced its "dedicated rideshare missions" for small satellites, small satellite start-up Momentus announced that it has secured a slot as SpaceX's inaugural customer in the rideshare program. 

Its payload: a small satellite that Momentus calls "Vigoride," massing just 80 kilograms. Essentially an engine-in-a-box, Momentus intends to market Vigoride as a space tug that can attach to another company's satellite (meaning that other satellite doesn't need to include an engine) and push it into its targeted orbit -- then detach and move on to perform the same service for other companies' satellites.

According to the company, depending on the orbit and the size of the client satellites it mates with, each fully fueled Vigoride put in orbit should be able to perform this service for as many as 10 other satellites before its "water plasma propulsion" system needs to refuel.

(And where will Momentus find the fuel? Maybe here.)

What comes next

Momentus aims to prove its Vigoride concept with SpaceX's first-ever dedicated rideshare launch in Q4 2020. And thinking ahead, the company already has plans in the works to develop other, larger space tugs -- "Vigoride Extended," "Ardoride," and "Fervoride." Indeed, that last one is billed as a space tow truck that could potentially haul other companies' spaceships all the way out of Earth orbit and on their way to deep space. 

With $34 million in private funding already attracted to finance its development work, Momentus is well on its way to giving Northrop a run for its money. Indeed, Momentus may even be better off than that figure suggests.

We suspect this because, in its press release announcing Momentus as its inaugural dedicated rideshare customer, SpaceX let slip that Momentus may be something more than just a "customer" to SpaceX. It may even become ... a partner. 

Momentus's "innovative technology," said SpaceX COO Gwynne Shotwell in a statement, "will offer a strong complement to Falcon 9's capability to reliably and affordably launch payloads for small satellite operators." And while that doesn't quite amount to an endorsement or a statement of intent, it does seem to imply that SpaceX may have bigger plans for Momentus than simply cashing the company's launch checks.

As a "complement" to rideshare, one Momentus Vigoride could potentially serve as the engine that puts multiple other companies' satellites -- also riding along on single Falcon 9 missions -- into their appropriate orbits. The ability to offer that service as a supplement to simply getting customers' satellites off the ground could significantly enhance the attractiveness of SpaceX's rideshare program in comparison to similar offerings from companies like Rocket Lab or Virgin Orbit.

So maybe Northrop Grumman isn't the only company that should be worried about Momentus.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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