Lockheed, Northrop Grumman Invest in Space Startup Orbit Fab

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As the commercial space economy heats up, existing players in the aerospace and defense industry are looking to invest in the latest technology, just like the proliferating crop of space startups.

Tuesday, The Wall Street Journal reported that the aerospace and defense giants

Lockheed

Martin (ticker: LMT) and

Northrop Grumman

(NOC) invested in Orbit Fab—a startup developing space-based refueling technology. The company’s website is headed with the words “gas stations in space.”

Lockheed and Northrop weren’t immediately available to comment on their plans for Orbit Fab.

Lockheed and Northrop might be best known for jet fighters and stealth bombers, but both have large space franchises. Lockheed owns half of United Launch Alliance with

Boeing

(BA). Lockheed is also in the process of buying the rocket engine maker

Aerojet Rocketdyne

(AJRD). Northrop acquired the space and defense company Orbital ATK back in 2018.

The investment is small, relative to the size of the defense giants, and their stocks weren’t doing much in response. Lockheed stock was down 0.7% in early Tuesday trading, while Northrop slipped 0.9%. The

S&P 500

and

Dow Jones Industrial Average

declined 0.2% and 0.3%, respectively.

Some of the new, smaller space stocks, however, were getting a boost. Stock in the space logistics firm Momentus (MNTS) was up 5.4%. The launch-services stock

Rocket Lab USA

(RKLB) rose 6.4%.

The investment comes as reusable rockets are dramatically cutting launch costs, while advancements in electronics are making satellites smaller and cheaper. The result is that a host of new space-based applications are becoming possible, encouraging a wave of startup activity.

Spire Global

(SPIR) and

AST SpaceMobile

(ASTS), for example, are building satellite constellations to image the earth and provide mobile communications infrastructure. Rocket Lab USA has launch capabilities to send those satellites into low earth orbit. Rocket Lab can manufacture satellites too.

Elon Musk’s SpaceX, of course, has launch capabilities and is building its own constellation of low earth orbit satellites to provide high speed internet access. SpaceX, however, isn’t publicly traded.

Momentus

calls itself the

FedEx

(FDX) of space. It will deliver space cargo where it needs to be, either by brokering space on a rocket launch or moving things around in orbit.

Orbit Fab, the refueling company, might want to call itself the

Valero Energy

(VLO) of space. It takes a lot of energy to get off the planet. That limits any spacecraft’s ability to travel long distances after leaving Earth’s gravity. Refueling in space can extend range. It can also extend the life of some satellites that slowly run out of juice.