European Rocket Builders Secured €1 Billion in 2024
2024 Funding Trends for European Rocket Builders
Government Backing: A significant portion of funding in 2024 stemmed from governmental or institutional programmes through grants and loans, particularly in Germany, France, and Spain. Programmes like France 2030 and Boost! were highlighted as key mechanisms for fostering innovation and ensuring European competitiveness in the global launch market.
Venture Capital: The involvement of private investors in Latitude’s Series B, Isar’s Series C extension and Orbex’s Growth Round represents slowing support from private entities in 2024. This was exemplified by the fact that Isar’s Series C extension saw contributions from the NATO Innovation Fund, a government-backed venture fund supported by 24 NATO governments.
Slowing Support for Industry Incumbents: ESA’s shift towards service-based procurement and programmes like the European Launcher Challenge and Flight Ticket Initiative indicate a push to diminish long-term reliance on subsidised incumbents. This reflects a strategic push to foster commercial viability and competitiveness among newer players, while also ensuring Europe’s sovereign access to space remains uninterrupted.
Parent Company Subsidies: The €85 million invested in MaiaSpace by ArianeGroup highlighted the advantage of parent-company support. This model enables established aerospace giants to incubate new technologies while maintaining financial and strategic oversight. MaiaSpace is a particularly extreme case, with the company being able to make significant use of not just parent-company funding but also key technology developed by the parent company. RFA is the other significant rocket-building subsidiary in Europe, with its parent company OHB.
In early 2024, it was hoped that the year would be definitive for the European launch services industry. In some ways, it was. In others, it failed to meet expectations. The return to flight of Vega C and the long-delayed introduction of Europe’s newest heavy-lift rocket, Ariane 6, were the year’s most important highlights. Both flights validated Europe’s ability to once again deploy sovereign orbital launch capabilities, as it has done since the launch of the French Diamant A rocket on 26 November 1965. However, these flights also highlighted the continued absence of a commercial alternative developed without the massive governmental support enjoyed by Avio and ArianeGroup for Vega and Ariane rockets.
Both Isar Aerospace and Rocket Factory Augsburg (RFA) appeared confident that they would be able to pull off an inaugural flight of their respective rockets in 2024. Orbex, while less specific about its goals, appeared to be a potential third. None of the three managed to do so. RFA came devastatingly close before the destruction of an RFA ONE first stage during a failed test. Isar appeared to have come close in late 2024, with company officials and closure notices suggesting there were preparations for a flight occurring at the company’s Andøya Spaceport launch pad in Norway. However, since early December, the confident statements from company officials and closure notices have dried up. Isar has declined to comment on when it expects to conduct its first launch attempt.
While 2024 was not the year of commercial launch services in Europe, hopes now shift to the introduction of at least one privately developed rocket taking flight in 2025.
On the financial side, European rocket companies managed to secure approximately €1.06 billion in new funding in 2024. The year’s funding rounds highlighted concerning trends in the market, with the over-reliance on government funding and a slowdown of private sector support. The bulk of the funding once again went to established players, with ArianeGroup and Avio receiving a combined €580 million to continue the development of Themis, Prometheus, Vega C, and Vega E. Twelve startups received a share of the remaining €484.4 million secured in 2024 to develop their respective launch systems.
Unique Approaches to Funding a Nation’s Launch Startups
Germany, France, and Spain led the way in 2024 commercial startup funding, each adopting distinctly different approaches to institutional support.
All of Germany's contributions to its launch startups in 2024 were awarded or promised through the European Space Agency’s Boost! programme. The ESA Boost! programme was adopted by Member States at the 2019 Ministerial Council Meeting in Seville, Spain. The programme focuses on fostering the development of European commercial space transportation services, particularly launch systems. Awards are provided as co-funding for specific projects or development goals, encouraging recipient companies to secure private investments and share development costs. In 2024, Germany allocated a total of €133.6 million to HyImpulse, RFA, and Isar through the Boost! programme. Companies from Spain, the UK, and Poland also received Boost! funding in 2024, totalling just €9.2 million distributed among three launch companies: Orbex, SpaceForest, and PLD Space.
France used its France 2030 programme as its primary mechanism for deploying funding. The France 2030 initiative was launched in 2021. The €54 billion investment programme is aimed at transforming key sectors of the French economy, including space, through technological innovation. While funding distributed through this programme in 2024 likely didn’t exceed €25 million, the country did commit to providing €400 million in funding to support HyPrSpace, Latitude, Sirius Space Services, and MaiaSpace. This funding is, however, directly linked to actual flights, with companies only receiving a small upfront award and the bulk of the funding being awarded after an inaugural flight. As a result, only an estimate of the small upfront award was included in the 2024 funding totals. Apart from that larger €400 million commitment, Latitude was awarded a pair of awards in June totalling €15 million.
What Germany and France have in common is that their funding allocations were quite focused. Both the Boost! and France 2030 programmes allocated funding for specific projects or flights. Spain’s approach, however, was a departure from what either Germany or France was doing.
Spain has far less diversity in its launch startups. Only PLD Space is currently pursuing the development of a rocket. This was, however, not the case at the beginning of 2024. Coming into the year, Spain was in the middle of choosing a launch champion, with a Pangea Aerospace-led consortium competing against PLD Space for a major award from the Spanish government. This race was ultimately won by PLD Space, which received a €40.5 million loan from the country’s government. This loan will be paid off using profits from PLD Space launches over a period of ten years, which may put pressure on the company’s profit margins over its first decade of operation. Later in the year, PLD Space received a second government-backed loan, this one for €31.2 million, that was allocated specifically to build out the company’s launch facility in French Guiana. Spain’s reliance on loans instead of a more direct funding model is an interesting one that will certainly put more pressure on the company in its early years of operation.
Private Funding
Notable private funding rounds in 2024 included Latitude's €27.5 million Series B in January, supported by investors such as Crédit Mutuel Innovation and Expansion. Isar Aerospace raised an additional €65 million in a Series C extension in June, with significant backing from the NATO Innovation Fund, pushing its total funding beyond $400 million. Orbex secured £16.7 million (€20.1 million) in a Series D bridge round, while POLARIS Spaceplanes completed two funding rounds, contributing €4 million to the year's total.
Combined, private investors contributed just over €115 million in 2024, and this includes support from the NATO-backed venture fund. By contrast, in 2023, Isar's initial $165 million Series C closing alone surpassed this figure, highlighting a slowdown in private investment activity.
Support for Institutional Rockets
2024 was an important year for institutional-supported rocket programmes. In July, ArianeGroup introduced Ariane 6, and in December, Avio reintroduced Vega C. In addition to successes on the launchpad, ESA also took steps to fund the next generation of European institutional rockets, with a total of €580 million allocated. The year may, however, also be a turning point for this kind of funding.
In November 2024, ESA awarded ArianeGroup an additional €230 million to advance the development of the Themis reusable rocket demonstrator and Prometheus rocket engine. The funding will go toward the development of a second Themis demonstrator, Themis T1E, featuring enhanced structures and propellant tanks for higher and longer flights, with medium-altitude hop tests planned at Esrange Space Centre in Sweden. Additionally, the investment will support the adaptation of the PF50 test stand in Vernon for extended Prometheus hot-fire testing. With this latest award, ArianeGroup has now received around €529 million for the development of Themis and Prometheus. While the company won’t be developing a commercial product directly through this initiative, the company’s subsidiary MaiaSpace will be.
MaiaSpace was founded in 2022 and had initially targeted 2025 for the completion of an initial test flight. However, after the company was selected to take over the old Soyuz launch facility at the Guiana Space Centre, the inaugural flight of Maia was pushed back to 2026 to allow the company time to complete the renovation of the facility. The partially reusable Maia rocket will stand 50 metres tall and will utilize a Themis variant for its first stage, powered by three Prometheus engines. The rocket’s upper stage, which has been largely developed from scratch by the company, will feature a single vacuum-optimized Prometheus engine. This setup relies heavily on the work ArianeGroup has done for Themis and Prometheus. In addition to its significant technology contributions, ArianeGroup substantially increased its financial support for MaiaSpace in 2024, providing an additional €85 million. This raised the total investment in the partially reusable Maia rocket programme to €125 million.
In December, Avio was awarded €350 million in funding. The award will be used to address immediate challenges faced by the Vega C programme, with a focus on boosting the rocket’s launch cadence. This will enable Avio and the rocket’s current commercial operators, Arianespace, to clear the backlog of flights, which was exacerbated by the rocket being grounded for nearly two years. Approximately 85% of the total €350 million will, however, be used to complete the development of the company’s next-generation Vega E rocket.
Vega E utilizes the first and second stages of Vega C, replacing the third and fourth stages with a single liquid-fuel upper stage powered by Avio’s new MR10 methalox rocket engine. Prior to the December 2024 award, ESA had allocated €171.8 million to the development of Vega E. With this latest award, that overall figure has been increased to €471.8 million. Development activities for Vega E include the upper stage, necessary adaptations to the Vega C first and second stages, and the renovation of the old Ariane 5 launch site at the Guiana Space Centre, which the company will utilize for Vega E launches.
Beyond Ariane 6
ESA’s outlook regarding the development and purchase of launch services is shifting, and Avio and ArianeGroup can expect to no longer enjoy guaranteed support. ESA has announced plans to step back from leading the development of launch systems, shifting its focus to purchasing services and fostering key technology advancements by serving as an anchor customer rather than a source of direct funding.
At his annual press briefing on 9 January 2025, ESA Director General Josef Aschbacher explained, in response to a question, that the agency’s European Launcher Challenge would be used as the catalyst to develop a successor to Ariane 6.
“The path is very clearly laid out. We have made decisions in Seville in November 2023 where we decided that through the European Launcher Challenge, we will develop the next-generation launcher after Ariane 6, and possibly also after Vega C. This is the process that was laid out before. We will issue an ITT around February this year to call for proposals for the new micro-launchers as they are today. Over the years, we will help develop them to get larger. That means launching from a few hundred kilograms to a few tonnes, reaching the level of Ariane 6 today.”
The European Launcher Challenge, announced at the ESA Council meeting in Seville, Spain, in late 2023, is intended to launch in early 2025. Winning bidders will receive €150 million each to support the development of their respective rockets. While this is a large single award, it’ll be supplemental and will not be nearly enough to develop an entire launch vehicle. However, it could serve as an important mechanism for companies transitioning from initial flights to profitable operations.
In addition to the European Launcher Challenge, the Flight Ticket Initiative, which is being managed under ESA’s Boost! programme with support from the European Union, is another project launched in 2024 aimed at supporting the development of new commercial launch services. In May 2024, ESA and the European Commission awarded contracts for the Flight Ticket Initiative to Arianespace, Isar Aerospace, PLD Space, Orbex, and Rocket Factory Augsburg. Each company will now be eligible to compete for work orders up to €5 million to provide launch services for ready-to-fly satellites. This initiative provides these companies with a vital opportunity to secure regular institutional contracts.
While a transition away from heavily investing in the development of launch systems may have begun, the agency’s financial commitments to the operation of Ariane 6 and Vega C aren’t going anywhere anytime soon.
At the ESA Council meeting in Seville, Member States approved subsidies for ArianeGroup and Avio to support the operation of Ariane 6 and Vega C. ArianeGroup will receive €340 million annually, while Avio will receive €21 million per year. Although this funding was agreed upon in 2023, its allocation will require formal approval at the agency's Ministerial Council meeting in late 2025. The subsidies for Ariane 6 will cover flights 16 to 42, with a previous agreement already providing support for the first 15 flights. Avio's subsidies for Vega C will begin with VV26, the vehicle’s next flight, and will continue for a total of 16 flights.
The Deployment of the IRIS2 Constellation
Although not directly tied to the development or funding of European rockets, the approval of the IRIS2 secure communications constellation marked another significant milestone for the European launch industry in 2024.
The IRIS2 constellation will consist of around 290 individual satellites in multiple orbits and will provide a sovereign, secure, and resilient communication capability that is free from outside influence. In December, the European Space Agency and the European Commission signed a €10.55 billion contract with the SpaceRISE consortium to develop and launch the IRIS2 secure communications constellation.
While the majority of the IRIS2 constellation is expected to launch aboard Ariane 6, the deployment of satellites into low Earth orbit presents a valuable opportunity to bolster emerging European commercial launch services. With initial launches planned for 2029, several European launch startups are anticipated to have transitioned to operational flights by then. Securing a share of these missions as part of the IRIS2 deployment could provide these companies with critical revenue streams, helping them navigate the challenging path to profitability. Additionally, such contracts could further support the development of larger, more capable rockets, strengthening Europe's competitive position in the global launch market.
Challenges and Opportunities
While funding levels are promising, challenges remain. The reliance on government support raises questions about long-term sustainability and market-driven growth. The lack of new private investment may, however, be a consequence of the stage at which many European launch startups find themselves. Private investors have committed funding and are now waiting for companies to deliver on an inaugural flight of their respective vehicles. Once this occurs, there may be renewed interest in investment as each company begins to scale up production capacities to deliver on launch contracts they have already secured.
Another notable concern for the industry is a saturation of players targeting the small satellite market, which is already highly competitive. Companies must, as a result, differentiate themselves through technology and reliability, with cost likely not being a significant differentiator given the near-unbeatable entry-level pricing of SpaceX Rideshare missions. Diversification of a company's offering will likely be the easiest solution without the need for a quick pivot to the development of a larger vehicle—something companies like Orbex have already signaled they intend to do.
Several companies are, however, exploring a diversified model. The likes of RFA, MaiaSpace, and, most recently, HyImpulse have revealed multi-role upper stages referred to as kick stages or orbital transfer vehicles. These vehicles can be used for a number of different applications, including last-mile delivery, in-orbit servicing, and orbital debris removal. This will allow these companies to offer services to two separate customer streams with a single launch.
Looking Ahead
The European launch services industry faces a pivotal moment. With significant funding secured in 2024 and new institutional programmes like the European Launcher Challenge and Flight Ticket Initiative on the horizon, the foundations for growth are firmly in place. However, the transition from reliance on government support to sustainable, market-driven operations will be a critical test for both established players and emerging startups.
Success in this transition will depend on the ability to deliver reliable launch capabilities, diversify service offerings, and scale operations efficiently. As Europe works to strengthen its sovereign access to space, 2025 promises to be a defining year.