Astronomy Prints 🌌: Military Space: Defense dollars flood space sector

10/14/2025

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By Sandra Erwin

Welcome to this week's edition of SpaceNews' Military Space, your source for the latest developments at the intersection of space and national security. In this week's edition: the space sector's defense windfall and how startups can crack missile defense

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Sen. Roger Wicker (R-Miss.), chairman of the Senate Armed Services Committee, cheered the Senate's passage Oct. 9 of the 2026 National Defense Authorization Act (NDAA) by a vote of 77-20, moving the $914 billion defense policy legislation forward for conference negotiations with the House, which passed its own version in September. Among the issues to be resolved in the conference will be finalizing acquisition reform legislation and the DoD topline, as the Senate authorized $32 billion more than the House. Credit: Sen. Roger Wicker

Defense spending lifts space

A new report from the venture capital Seraphim Space estimates $3.5 billion in investment went to the space industry in the third quarter of 2025, which the firm said is an all-time high. Among the key drivers: U.S. missile defense funding and Europe's sovereignty push.

A SpaceNews event last week showcased how the commercial space landscape has shifted in 2025, with defense spending driving what investors are calling the start of a "super cycle."

"Our industry and the outlook for space has very significantly changed during the course of 2025," said Mark Boggett, chief executive and general partner at venture capital firm Seraphim Space. "What has changed in 2025? I think the answer to that question is Donald Trump. He's the answer to a lot of questions at the moment."

Europe's pivot: The continent is racing to build sovereign space capabilities amid fears of U.S. unreliability. Boggett noted that Europe now has "a trillion euros of budget in that market with a very significant need to effectively wean off U.S. capability and create sovereign capability in Europe." Germany alone is planning roughly $41 billion in space investments by 2030.

The shift traces back to Russia's 2022 Ukraine invasion and solidified at this year's Munich Security Conference, where European allies confronted their dependence on American systems.

The European Commission's recent push to increase defense and space funding signals a clear ambition, said the Seraphim report. "The EU wants to secure strategic autonomy and reduce dependence on external powers."

Golden Dome gold rush: Defense contractors in the U.S. are positioning for the Trump administration's missile defense initiative, which will rely heavily on satellites.

"That's going to be a big driver for how space-based assets will be acquired, not just for Golden Dome, but how they will be acquired for other programs as well," said Kirk Konert, managing partner at AE Industrial Partners, whose portfolio includes Firefly Aerospace, York Space Systems and Sierra Space.

Firefly — which went public this year — announced plans to acquire defense analytics firm SciTec to expand its national security footprint.

Investors rethink their strategy: "If you rewind 18 months ago, space and defense tech wasn't one of the best ideas for institutional investors," Konert said. "Over this past year — and particularly in the last six months — defense tech and space tech are among their top ideas."

Falling interest rates are helping, too, reopening public markets and boosting valuations for space and defense companies.

What they're buying: Governments want surveillance, secure communications, missile warning systems and new data collection capabilities like radio frequency monitoring. Spire Global CEO Theresa Condor said anti-satellite interference such as GPS jamming is now spreading beyond Eastern Europe into the Middle East.

"You're seeing a lot of interest in data, in the infrastructure to create unique and new data sets, as well as to be able to analyze and understand those data sets," she said.

The bottom line: "We're still in the early innings of what we're seeing as a long macro super cycle for defense tech spend and space tech spend globally," Konert said. Expect more M&A and a wave of new investors piling into the sector.

New Zealand bets on military space

New Zealand's defense and space minister Judith Collins is tying defense dollars to space sector growth, banking on dual-use tech to compete globally.

The pitch: Collins is positioning the space sector as one of three top priorities in the country's new defense industrial strategy. Her message? Defense investments will directly fund space capabilities while expanding the national economy.

Collins has emphasized that New Zealand can compete in the global space market, leaning heavily on the dual-use nature of space technologies that serve both military and commercial customers.

What she's saying: In a recent speech to the local defense industry, Collins tied national security investments to economic benefits, "explicitly stating that investments in defense — including support for space and advanced aviation sectors — will help expand the national economy and position New Zealand as a leader in smart military technology."

The strategy: Wellington is rolling out regulatory and procurement reforms designed to get local companies into defense and space supply chains. That includes a new regulatory sandbox aimed at growing sovereign space capabilities.

What's next: More details on the space capability push are expected later in 2025. The focus remains on advanced manufacturing, autonomous systems, and ensuring New Zealand captures a larger slice of international commercial space opportunities.

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Can tech startups get their shot at Golden Dome?

Aerospace accelerator Starburst is telling defense tech founders that the Pentagon's push to build a next-generation missile defense architecture could mark their best chance yet to break into a market long dominated by primes.

In a report published last week, the firm argues that integrated air and missile defense — historically the exclusive turf of established defense contractors — is hitting an inflection point where fast-moving startups can actually compete.

Why now: The threat environment is forcing change. Future conflicts are expected to feature hypersonic missiles, drone swarms and anti-satellite weapons fired in coordinated salvos designed to saturate legacy defenses. The Pentagon's traditional model of bespoke, slow-to-field platforms can't keep pace.

Enter Golden Dome, the Defense Department's effort to build a layered architecture spanning space, air, and ground that integrates interceptors, sensors, and command systems into a unified shield.

The numbers: Starburst estimates $25 billion to $125 billion in new contracts could flow over the next few years, based on current projections. The Missile Defense Agency's $151 billion SHIELD multiple-award IDIQ will serve as the central contracting vehicle.

The message to founders: Even capturing 0.5 percent of Golden Dome and integrated missile defense budgets translates to billion-dollar outcomes.

Where startups can win: Starburst flags three sweet spots. First, AI-enabled edge computing — legacy systems run on outdated processors that can't handle modern AI workloads, creating demand for hardened platforms that can run models at the point of collection. Second, interoperability layers — current missile defense systems sit in proprietary silos, and commercial firms can build open battle management frameworks and APIs to connect them. Third, integrated solutions that solve complete mission problems rather than just selling a component.

Reality check: Urgency could still favor existing primes with their government contracting infrastructure and security clearances already in place. But Starburst's message is that this is a multi-year contract environment, and the companies that integrate early could become default suppliers going forward.

Planet Labs inks new agreement with U.S. Navy

The Earth imaging company Planet Labs last week announced a new military contract as well as plans to upgrade its constellation.

The Navy deal: The San Francisco-based company secured a $7.5 million contract extension from the Naval Information Warfare Center Pacific to continue vessel detection and monitoring across the Pacific — an expansion of a deal first inked in March 2024.

The work taps Planet's 200-plus satellite constellation, which images the entire Earth daily, to feed maritime tracking data into the Transportation Department's SeaVision platform used for situational awareness.

The capability is useful for countering so-called "dark vessels" that don't broadcast their positions via Automatic Identification System transponders. Using AI technology from partner SynMax, the service can spot smuggling, illegal fishing and ship-to-ship transfers — activities of keen interest to the U.S. and its Indo-Pacific partners as China expands its maritime presence in the region.

New metal: CEO and co-founder Will Marshall announced Planet is developing Owl, a next-generation satellite class set to replace its workhorse SuperDove constellation. The first Owl will launch in late 2026, delivering one-meter resolution imagery — a significant jump from SuperDoves' three-to-four-meter capability.

The satellites will pack Nvidia processors enabling onboard AI processing to identify objects and detect activity in real time. A technology demonstration mission will fly first, with a full fleet to follow in subsequent years.

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