A new generation of space businesses is turning ideas into reality, raising major funding and redefining what is possible beyond Earth. McKinsey estimates that the global space economy will be worth $1.8 trillion by 2035. But the next generation of space startups isn’t focused on reaching orbit. It’s focused on building the infrastructure that will make a permanent space economy possible.

A decade ago, space belonged almost exclusively to governments and billion‑dollar corporations. The convergence of lower launch costs, the improvement of the processing capability to turn satellite data into actionable intelligence, and customers recognizing that commercial solutions can meet mission-grade requirements, even for national security applications, has created exciting opportunities for space entrepreneurs.

Building A Power Grid In Space

This booming sector has catalyzed companies like space infrastructure startup Mantis Space , which is building the first-ever power grid for space. Using precise, military-grade laser beams, their spacecraft constellations will collect solar energy in medium Earth orbit and beam it directly to client satellites' solar arrays, eliminating the need to carry heavy battery banks or rely solely on direct sunlight.

CEO and cofounder Eric Truitt, who spent his entire career in space technology, moving from user to designer to builder, explains the step change that has enabled companies like Mantis Space to compete.

“What SpaceX truly enabled with the Falcon 9 was that anyone could access space,” he says. “It’s a model where you choose how much mass you want to put in orbit. Today, that figure is about $1,500 per kilo. What’s really changed is that we can now form a company with $5 million or $15 million and build something with the capability that goes to orbit. What’s really important is there is truly now a market in space, with demonstrated demand and demonstrated value.”

Bringing Satellites Out Of The Shadows

Initially, the team had explored the idea of beaming solar energy from space down to Earth, but as COO and cofounder Jeremy Scheerer points out, the problem with that concept is the challenge of physics.

He says: “You can only power an array of the same size on the ground as you can in space. To be viable, you have to build mega‑structures and compete with cheap terrestrial power. The reality is that half the Earth is always in the shade, and therefore about half the satellites in orbit are in that shadow at all times. That’s when we realized the solution: transmit power from space to space.”

Mantis Space, which operates a 20,000‑square‑foot laser optics laboratory in Albuquerque, New Mexico, closed a $15 million seed round and secured around $28 million in non‑dilutive capital from state and local sources.

It employs around 22 people, including scientists who helped invent optics technology for the iPhone, ran optics for the James Webb Telescope, and invented next‑generation display technology at Google.

Space Capabilities Driving Missions On Earth

The most recent addition to the Mantis team is cofounder and Chairman Hugh Wyman Howard III, who brings 32 years of U.S. Navy experience solving high‑stakes national security challenges. He spotted a direct parallel between his service and Mantis’s mission.

He says: “As a user of space capabilities to deliver decision advantage for missions on earth, I saw power as the real limiting factor. I saw the limits of space capabilities, given their power constraints, and realized that power in orbit is the pacing capability for what’s possible in space.”

A confessed ‘space nerd’, he had studied space in graduate school, civil, commercial, and military space. He says: “When Eric and Jeremy approached me, it took me less than 120 seconds to say ‘I’m in.’”

Closing The Funding-Revenue Gaps

The opportunities may be huge, but the space startup ecosystem is still fraught with challenges and has two distinct failure modes. And according to Ann Stevens, CEO of ICEYE , which operates the world’s largest SAR satellite constellation, they are not talked about enough together.

She says: “The first is the valley of death between early capital and sustained, dependable program-of-record revenue; that gap where you’ve proven the technology but haven't yet converted it into the kind of contractual relationship that supports scale.

“The second is the operational maturity gap. Building a constellation is hard, but operating one reliably, day after day, at the standards that mission-critical customers require while delivering mission-relevant capability, is a different discipline entirely.”

Many companies solve for the first challenge and are very good at raising capital and generating interest. Fewer solve for the second. “The ones that make it are typically the ones that treat operational reliability and mission relevance as core to their offering, not an afterthought,” adds Stevens.

Lift Off For Space Investment

The space sector has seen a dramatic surge in investor interest in space startups, driven by the convergence of several factors. The success of SpaceX in particular, and other early space pioneers such as Hawkeye360 , which recently floated on the New York stock exchange, has demonstrated that space tech is delivering revenues and serious returns to investors.

Dr Maureen Haverty, investment principal at Seraphim Space , explains: “That’s crucial because it has become much easier for space startups to convince investors that what they’re doing is not only technically feasible but will deliver commercially in venture timescales.”

Another key factor is the geopolitical environment, which is driving the U.S. to invest in in-space defense and Golden Dome architecture in space. This has led to a boom in satellite manufacturing and strong growth in its supply chain.

Mega-trends, such as direct-to-cell and in-space compute, are also driving upward investment trends. “SpaceX’s Starlink is delivering direct-to-cell to users, and that is leading some telcos to partner and others to seek alternatives to improve their own service,” adds Haverty. “In-space compute, which could eventually become orbital data centers, has a lot of technical challenges that need to be solved, but the prize is obviously enormous if compute can be moved off Earth.”

Contingency Is Key To Funding

One of the biggest hurdles for space startups today is finance, and having contingency in the event of launch delays, internal delays, or regulatory delays. And the industry-wide backlog for SpaceX transporter missions means that launches must be booked well in advance.

“Early-stage companies that are under-capitalized tend to book one slot at a time, which can really damage their ability to scale after that important successful first mission,” she adds. “It may be 18 to 24 months before their next launch, so, to maximize growth, companies must raise large enough rounds that allow them to book several missions, essentially at risk.”

The Environmental Benefits

The goal for Mantis Space is to start, in 2028, to put satellites into orbit and demonstrate power delivery capability. Long term, the company will move into supercharging mode.

Their efforts also have an environmental impact. Today, defunct satellites are dropped into the Pacific Ocean. Creating infrastructure that exists permanently in orbit reduces the mass launched. And as solar cells degrade over time, companies like Mantis Space can offset that loss by extending satellite lifespans from three to five years up to 10 or 12 years.

“We are building core infrastructure: satellites and power transmission capability using lasers,” says Truitt. “Ultimately, we are enabling humanity’s ability to go beyond Earth, and by solving the power constraint, we unlock the true potential of space.”

Delivering Mission-Relevant Capability

Meanwhile, Stevens’ advice to emerging space companies is threefold. The first is to understand the customer’s mission. She says: “The national security community doesn’t need more sensors; it needs persistent, reliable, trusted data delivered into the architectures it already operates.”

Second, she says, take governance seriously from day one. The customers who can fund scale have long memories and rigorous vetting processes, and for good reason.

Third, treat operations like a product. Anyone can build and launch satellites today. The space startup that lasts is the one that obsess over what happens after: reliability, latency, consistency. Stevens adds: “The companies that will matter in five years are the ones reliably delivering mission-relevant capability that's genuinely hard to replace; not the ones optimizing for the next funding round.”