From launcher crisis to cosmic ambition

As launch costs decline and open previously cost-prohibitive possibilities, a growing range of players aim to leverage space-based capabilities for applications such as drug development and semiconductor manufacturing. But with increasingly critical use cases, including defense, who is providing launch capacity truly matters. That’s why Europe is now determined to secure reliable, autonomous access to space, with privately developed small and medium launchers that complement heavy-lift providers like Ariane.

The need is urgent: delays to the Ariane 6 program, the loss of access to Russia’s Soyuz rockets following geopolitical tensions, and the resulting reliance on non-European launchers like SpaceX’s Falcon 9 have culminated in what ESA Director General Josef Aschbacher has called a “launcher crisis.”  

While Europe's homegrown solution to this crisis involves a public agency supporting private companies in a domain traditionally dominated by state actors, it's not without precedent. As Orbex CEO Phillip Chambers noted on stage during DTM25, this is akin to what NASA did in 2006 when it launched the Commercial Orbital Transportation Services program (COTS). This innovative model of government-industry collaboration to develop new space transportation capabilities paved the way for SpaceX's rise. 

Five rockets, one dream: Meet Europe's space cavalry

ESA’s Launcher Challenge is now aiming for a similar transformation, but with a crucial twist. Unlike NASA, which ultimately saw one dominant champion emerge, ESA is deliberately fostering a diverse ecosystem with multiple competitive launch providers. As announced this summer, five companies have been preselected as Challengers that will move forward with the next stage of the European Launcher Challenge: Isar Aerospace from Germany, Orbex (Orbital Express Launch) from Scotland, Maiaspace from France, PLD Space from Spain, and Rocket Factory Augsburg (RFA) also from Germany.

This approach and selection lean into Europe’s geographic and industrial diversity, spanning multiple countries and regions. But despite their varied origins, the Challengers share key traits, which also overlap with ESA’s evaluation criteria: cutting-edge technology, fast development cycles, capital efficiency, and a focus on meeting both commercial and governmental needs.

Isar Aerospace illustrates all this: a TUM spinoff, the German startup recently became a unicorn with a €150 million funding round that shows it is venture-backable. And while its first test flight crashed, the company deemed it a success. "We demonstrated that we can design and build and launch rockets,” its CEO and co-founder Daniel Metzler said.

Isar Aerospace is already working on the production of launch vehicles for its second and third flights , and the other Challengers will have to keep moving equally fast. As a first step, the European Launcher Challenge requires all of them to successfully achieve an orbital launch no later than 2027 to validate their selection. 

In a second step, ESA will become their customer for ESA missions that are expected to be launched at the latest by 2030. The expectation is that it will help these companies further evolve their launch systems and improve their services to offer even more capacity to all customers, fostering a vibrant European New Space sector.

As for ESA itself, it will see its role evolve compared to its traditional activities: Instead of acting as a design authority, it will be a mere customer, and perhaps even the ideal one, with a commitment to "providing funding and stability without defining service characteristics and performances." And by not committing to one player, it will also contribute to innovation and competition for better pricing and technology, something other public agencies may want to keep in mind.

The concept of ESA as an anchor customer is also a reminder that having anchors is important not only for securing contracts but also for attracting funding—much like how anchor LPs help VCs, or lead investors support startups. It also underscores the need for companies to think beyond their home markets and unlock success by finding an entity that is looking for European champions, not national ones.

That's sorely needed: Amid fierce competition from the US and China in space launch capabilities, Europe has some catching up to do. But taking off now, when sustainability is finally more than an afterthought, could give European New Space a competitive advantage. 

Countdown to European space sovereignty

If this happens, the key lesson will be that addressing sovereignty gaps not only creates immediate demand but simultaneously fosters conditions for better pricing, increased sustainability, and innovation across the ecosystem — and that Europe can excel at this.