The Private Equity Pivot

Why PE Money Is Now Flowing Into Space Supply Chain Companies Instead of Launch Providers

Private equity money in space is no longer chasing the next glossy rocket render. It is increasingly buying the companies that machine tanks, harden electronics, operate ground stations, and write the software that keeps the whole system humming. That pivot toward space supply chain “picks and shovels” looks rational given today’s cash flow, contract visibility, and exit options—but the valuation step-up some suppliers now enjoy will only hold where the underlying business really deserves it.

From launch bets to picks and shovels

A few years ago, “space investing” was almost synonymous with betting on launch. From 2019 through 2022, SPACs and late-stage venture rounds poured billions into vehicle builders and orbital platform startups, all premised on the idea that drastically lower launch costs would unlock trillion-dollar markets in satellites, manufacturing, and data relay. The pitch decks showed fleets of rockets landing on ocean barges, constellations deploying by the thousands, and revenues ramping to hockey-stick proportions. Private equity, ever pragmatic about cash flow and timelines, largely sat that cycle out—preferring to watch from the sidelines as growth equity and public markets tested those assumptions.