A Tale of Three Launch Startups
- Caleb Henry
- Oct 7
- 2 min read
October 7, 2025 - Written by Caleb Henry
Firefly’s surprise weekend announcement that it is buying software specialist SciTec shows how aggressively the company is moving to become a full-fledged space and defense company not defined solely, or even predominantly, by launch.
The $855 million deal, comprised of $300 million in cash and $555 million in stock, is nearly as much as what Firefly raised in its IPO ($868 million) just two months ago. SciTec adds 475 employees to Firefly’s ~800, growing headcount by roughly 60% and reshaping Firefly into a bigger contender for Golden Dome work.
Compared with the other U.S. launch companies that went public this decade – Rocket Lab and Virgin Orbit – Firefly’s evolution is the most rapid from a financial standpoint. In its first few months as a public entity, Firefly is outpacing what Rocket Lab spent in four years on M&A.
Why the urgency?
First, it’s conventional wisdom now that launch as a standalone offering is a hard business, especially absent a large government anchor contract, which Firefly lacks. The total market is only $5-7 billion dollars per annum, which is then divided into smaller buckets defined by launch mass, orbital inclination, and national sovereignty. Firefly already expanded beyond launch in years prior with its lunar landers and Elytra multi-mission spacecraft, but the foray into defense expands its total addressable market by an order of magnitude.
Rocket Lab, a peer competitor, demonstrated the effectiveness of diversifying into spacecraft manufacturing and defense over the course of six acquisitions since 2021. Virgin Orbit, on the other hand, adopted the novel approach of making minority investments into potential customers (SatRevolution, Arqit, Horizon Technologies, etc.), which left the company with no tangible revenue-producing assets when its launch business stumbled. As a result, the company was liquidated two years after its IPO. (To be fair, Virgin Orbit was late to the SPAC IPO fad, and the $228M it raised was less than half the company's target, leaving it more cash strapped than comparable launch IPOs).
Second, missile defense is hot, and that’s with or without Golden Dome. SciTec is a subcontractor under General Dynamics Mission Systems for the ground segment of the Space Development Agency’s PWSA missile warning constellation, and counts the Missile Defense Agency among its customers. Future spending on Golden Dome amplifies this market opportunity.
Third, software talent is an increasingly needed but tough skill set for space companies to obtain, especially in the age of AI. Acquiring SciTech enables Firefly to quickly acqui-hire a talented pool of software engineers rather than manually scraping together the capability through a laborious and lengthy hiring process.
SciTec is a cash-flow positive business, and as a software company, likely has margins that surpass what Firefly obtains from its hardware-centric business. The acquisition puts Firefly on an accelerated track to profitability with the workforce and product offerings needed to capitalize on the surge in U.S. missile defense spending.
