Lockheed and 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 seek to invest in the latest technologies, as does the proliferation of space startups.

Aerospace and defense giants

Lockheed

Martin (ticker: LMT) and

Northrop Grumman

(NOC) have invested in Orbit Fab, a startup developing space refueling technology, TThe Wall Street Journal reported Tuesday. A banner on Orbit Fab’s website reads “Gas stations in space.”

Orbit plans to launch two refueling shuttles as early as 2022. Right now the key application will be satellite refueling. Later, services on other spacecraft might be possible.

Lockheed and Northrop are perhaps best known for their fighter jets and the stealth bomber, but both have great space franchises. Lockheed owns half of United Launch Alliance with

Boeing

(BA). Lockheed is also in the process of acquiring the rocket engine manufacturer

Rocketdyne Aerojet

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

The investment is low, for the defense giants, and their actions were not doing much in response. Lockheed stock was down 1.4% before Tuesday’s afternoon session, while Northrop slipped 1.7%. The

S&P 500

and

Dow Jones Industrial Average

fell by 0.3% and 0.7% respectively.

Some of the newer, smaller space stocks, however, were getting a boost. Space logistics company Momentus (MNTS) rose 5.4% early in the session before falling. Shares were stable from the afternoon. The stock of launch services

Rocket Lab United States

(RKLB), however, was up 18.2%.

The investment comes as reusable rockets dramatically reduce launch costs, while advances in electronics make satellites smaller and cheaper. The result: a multitude of new space applications become possible, encouraging a wave of start-up activities.

World Spire

(SPIR) and

AST Mobile Space

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

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, is not publicly traded.

Momentum

is called

FedEx

(FDX) from space. It will deliver space cargo, either by negotiating space on a rocket launch or by moving objects in orbit.

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

Valero Energy

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

Write to Al Root at [email protected]