Stoke Space’s $510 million tour shows the future of launch belongs to defence

Stoke Space announced a huge capital raise on Wednesday that at first glance may appear to be just another bet on the commercial launch market. Details tell a different story.

Led by billionaire Thomas Tull’s Innovative Technology Fund, a fund that explicitly invests in technologies related to national security, the $510 million fourth round underscores a larger shift in the launch industry. The longstanding assumption was that the launch winners were the companies that received the lion’s share of commercial payloads.

While there is still demand on the commercial side from private constellation developers and emerging use cases such as in-space manufacturing or lunar payloads, the center of gravity has shifted decisively towards defence.

Just a few years ago, space startups were selling investors visions of a rapidly expanding commercial market for weather monitoring, broadband, and remote sensing satellites. For example, Astra told investors in its 2021 SPAC that it would eventually launch hundreds of rockets annually to serve the growing small satellite market. Relativity Space has pointed investors to a 3D printing revolution that would make rockets cheap enough to meet huge commercial demand.

But there are only so many commercial payloads that can be flown, and only one company – SpaceX – has been able to launch them consistently cheaply and reliably.

Meanwhile, the defense is on the opposite path.

Geopolitical shifts, such as Russia’s war against Ukraine and China’s growing competition in space, have created new tailwinds. The Pentagon’s new “Golden Dome” initiative, a multi-billion-dollar project aimed at creating a layered missile defense shield over the continental United States, has flooded the space ecosystem with lucrative new opportunities.

On the other hand, programs such as the Space Force’s National Security Space Launch and the Space Development Agency’s Missile Defense Satellite Constellation promise promising years of predictable, high-value contracts.

I’ve noticed startups launching. Their language, investors and business models have been realigned towards a single buyer: the US government.

In a press release, Stoke Space pointed to this reality, saying the new funding would boost “capability across the U.S. space industrial base.” Support from other new investors, such as Washington Harbor Partners LP and General Innovation Capital Partners, further highlights Stock’s “importance to national security and the U.S. industrial base,” the company said.

Stoke’s recent wins highlight this fact. In March, it was one of a handful of launch providers selected for the NSSL Phase 3 Lane 1 program, which allows the company to compete for up to $5.6 billion in launch contracts over the next decade.

Other recent deals tell a similar story. Firefly’s recent acquisition of SciTec for $855 million It was framed by CEO Jason Kim as a move that enhanced the company’s “ability to support an increasing number of defense missions.” In an attempt to deepen its “national security capabilities.” Recently, Relativity’s new owner, former Google CEO Eric Schmidt, warned lawmakers that if China achieves superintelligence first, “it changes the balance of power globally in ways we have no way of understanding, predicting, or dealing with.”

While his comments were not specifically related to the launch, they sum up the broader sentiment across the space industry: America cannot lose in strategic areas like space and artificial intelligence.

In this context, USIT is making clear progress in the new round. Thomas Toll launched the fund in 2023 to finance technologies “relevant to the national interest.”

Previous investments are wide-ranging but related to national resilience, including defense startup Shield AI and Gecko Robotics. Stock’s inclusion in that portfolio reinforces the new reality that space investing lies squarely at the intersection of venture capital and defense budgets.