Going to the Moon is a Way for Space Startups to Make Money

It's not a secret that startups are eager to build businesses on the moon in conjunction with NASA and SpaceX, but first, they must get there

‍

Throughout the last couple of decades, NASA has been planting the seeds of a full-fledged lunar economy, hoping that one day it will blossom into a reality. A future scenario is that private companies could provide transportation to and from the moon, establishing a scientific base to conduct research and, eventually, mining lunar resources as well as lunar ice for use as propellants for rockets. In a nutshell, this is quite a big vision that could be taking shape this year and will eventually lead to a market in which companies will be able to turn a profit by using the lunar environment in a similar way to how they do it now with orbiting satellites. 

‍

In order for a future like this to materialize over the next decade or so, much will have to go right, starting with the easy fact that trips to and from the moon will be as routine as satellite launches over the next decade or so. For the time being, it appears that the lunar economy is primarily dependent on money derived from NASA contracts, and it is probable that this will continue well into the next decade. Private companies will need to find a way to operate on the moon without the help of the government if they are going to create a self-sustaining lunar economy.

‍

“I believe the first hurdle is getting there: will they be able to get there?” Space Capital's managing partner, Chad Anderson, said. “Afterwards, it's a question of reliability and regularity. ” 

‍

A NASA mission to the moon has been launched as part of the agency's Artemis program earlier this month, sending a spacecraft into lunar orbit and returning back to Earth, a precursor to a human landing on the moon for the first time in over half a century scheduled for November. This time around, it appears that NASA intends to stay in the area for a long period of time. In order to foster a potential commercial marketplace, and at the same time enlist the aid of the private sector at the same time, the agency is looking to bring in private sector assistance in order to foster the development of a commercial marketplace. 

‍

The first step taken by the agency was to award contracts to commercial space companies to design and launch spacecraft that will be capable of ferrying payloads and eventually people to the surface of the moon. Currently, three private companies are competing in order to be the first to land a vehicle intact on the moon this year. A smooth landing would definitely be a step in the right direction, but that would only be a very small step. Due to its average distance from Earth - nearly 240,00 miles (382,500 kilometers) - while also being subjected to temperatures that can range from 250 degrees Fahrenheit (121 degrees Celsius) to -208 degrees (-133 degrees Celsius), maintaining equipment in the lunar environment presents major technical challenges. Transporting people to and from the moon is a decade away from becoming an affordable and routine part of life, even in the best-case scenario. 

‍

The former deputy administrator for NASA, Lori Garver, expressed confidence that they will achieve the goal. “Timing is a concern for me."

‍

Since the beginning of the decade, the largest investments that have been made by the space industry have been much closer to home. The vast majority of investments that have been made in space over that time, approximately $272 billion, have gone toward satellites and rockets that are used to carry them into orbit around the Earth. Anderson explained that the lunar market is part of a broader category of emerging market investments, which includes satellite servicing and space habitats, which are also emerging markets. Over the last decade, these markets accounted for only 3.3 billion of the total amount invested in the space industry. 

‍

“It is much riskier than what we are doing right now. As a matter of fact, there is a risk squared, or even a risk cubed. When you invest in something, you're relying on the fact that something else is taking place at the same time," Anderson said. “There is a risk associated with ecosystems that you are taking on.

‍

It is only through NASA's return to the moon, which started under President Trump's administration and continues under President Biden's administration, that some have been able to make this kind of risk-taking acceptable to them. Intuitive Machines, which is based in Houston, Texas, is one of the organizations that declare the moon of strategic interest. That means that the government is going to spend money on the moon in the near future. 

‍

NASA awarded SpaceX a $2.9 billion contract in April 2021 for the development of a lunar lander that can carry people to and from the surface of the moon using the massive Starship spacecraft built by the company. 

‍

Another less prominent component of the program is the development of a fleet of smaller robotic spacecraft that will be used for transporting payloads and cargo to the moon in the future. Commercial Lunar Payload Services, or CLPS for short, is a program that is designed to assist companies in funding the development of robotic landers such as these. After these spacecraft are completed, NASA can become a customer, buying space on them once they are completed, which the companies could then use to earn more revenue from other paying customers by transporting cargo for them. A new round of multi-million dollar CLPS contracts was awarded by NASA in 2019 to three companies. Two of them, Intuitive Machines and Pittsburgh-based Astrobotic Technology, are still in the race for a space mission to the moon.

‍

Astrobotic and Intuitive Machines are planning on landing on the moon within the next few months. It is planned that Intuitive Machines plans to successfully land on the south pole of the moon in late June after launching on a SpaceX Falcon 9 rocket, whereas Astrobotic plans to target the biggest dark spot on the near side of the moon known as Oceanus Procellarum. Astrobotics' ride will be the first launch of a Vulcan rocket from the United Launch Alliance, which will be the first for the company. 

‍

As well as racing against them, they're racing against another company: The Japanese company Ispace Inc. has already launched a spacecraft that is on its way to the moon to try and become the first private company to land a vehicle intact on the surface of the moon. There was a plan by an Israeli nonprofit corporation, SpaceIL, to land on the moon in 2019, but the spacecraft crashed on the surface after coming in too fast. 

‍

Intuitive Machines has confirmed that it will turn a profit on its first flight, in part by selling space on its lander to customers other than NASA, including Columbia Sportswear and Lone Star Data Holdings, Inc., according to Altemus. In addition to NASA payloads, Astrobotic carries a variety of other payloads. The company has a number of customers, including Carnegie Mellon University and the German Aerospace Center. It is not uncommon for customers to want to test out various cargoes on the moon in the harsh environment of the lunar surface.  

‍

“With the help of the Space Technology Mission Directorate, NASA can evolve from being the primary customer to being one of many,” said Reuter. 

‍

There have been instances in the past when NASA has used a strategy such as this - companies getting assistance from it but putting their own money into the project - to foster innovation in a new area of space, whether it is satellite launches or sending astronauts to low-Earth orbits for a fee.

‍

“As always, the government takes the lead in the development of new markets," Anderson said. “As it turns out, this was the case in the space economy at large 12 years ago, before SpaceX was founded." 

‍

The Space Agency has announced that they will be requiring a range of lunar services as part of its Artemis program, ranging from power generation, cargo transport, communications, and more as they move forward with the program. We are hoping that private companies will be willing to take part in the bidding process for this work. It is clear that NASA does not want to be the only one to pay for the goods and services on the moon at some point in the future. New opportunities might arise as a result of regular and more affordable trips to the moon being made available in the future. In addition to the Peregrine lander, Astrobotics' Peregrine lander is scheduled to land on the moon in 2023. 

‍

The future business could be drawn from the exploitation of the moon's natural resources, in particular lunar ice, which could be found trapped in permanently shadowed regions at the moon's south pole, which could be a potential source of future revenue. A number of organizations, such as NASA and others, have proposed using this ice as fuel for rockets or as a source of water for habitats.

‍

Lunar ice may not be the only prize. Reuter cited the potential for extracting oxygen from the soil, as well as metals and metallic minerals that can be used to manufacture infrastructure for a lunar base and other purposes. “What we try to do is establish an environment where we can be a customer for that and that we can draw from them and be a kind of a co-developer if you will,” Reuter said. 

‍

Mike Gold, a former NASA associate administrator for space policy and executive at startup Redwire Space, said new markets could emerge in the following years.

‍

“One of the greatest commercial activities on the moon could be something we haven't even thought of yet,” Gold said, “that we aren't even contemplating right now.” 

‍

The question remains, however, whether a company is capable of sustaining itself in the long run by selling space on a lunar lander. It is possible that all of this could be the start of a thriving commercial market in the near future. There is also the possibility that NASA may have to serve as the main customer for the foreseeable future if this situation persists. Anderson argues that if this occurs, a lunar marketplace will never be fully commercialized, but will rather act as a kind of massive defense program mostly reliant on government contracts, similar to the market for aircraft carriers if that happens. 

‍

While there is a great deal of promise for both lunar landers as well as larger vehicles such as SpaceX's Starship, the lunar economy won't be a reality until we actually see a craft touch down on the moon. It will still be a long time before anyone makes any money on the moon, even then.