As I was thinking about this presentation and what I should put forward here, instead of the typical shameless company plug that I might normally do, I figured I'd do something a little bit different. This Christmas I was reminded by my teenage children that in fact, dad is no longer cool, he's just old. I don't do TikToks and I don't even have Snapchat, but it did kind of remind me that I've been in this business for over 20 years now and maybe I should have a look back on some of the stuff. So, this is kind of my view of the space industry as it sits today. I reserve the right to be completely and totally wrong, and let's all agree that we won't go back in a year's time and look at any of this because I think it's probably going to be embarrassing. But nevertheless, I thought it might be fun to have a look at this and see what we all think.
So I'll start off with something that's obviously very close and dear to me, which is the state of launch within the industry. I think one thing that's kind of a little bit peculiar is that there's never been more rockets either in development or flying or launch cadence than ever before, which is super cool. But the flip side to that is there's never been so much constraint on supply of launch as well. So it's a crazy time when we're launching and doing things more than ever before, but there's still more demand than we've ever also seen before.
Obviously, our view is small launch has well and truly been solved. Some of you who have been at this conference for a number of years like me will remember the list that came out every year of some, I think it peaked at like 145 small launch vehicles in development at one point in time. So I think Electron's been very successful there and small launch is well and truly a solved problem. But on the non-solved problems, both competition and capacity in the medium launch category is much needed. Obviously, we're trying to address that with Neutron and others have got other vehicles in development, but there's one obviously very great and dominant provider, but there needs to be a little bit of balance restored to competition and opportunities. And also if you look across the number of constellations and spacecraft that require launch, there's still a deficit in that medium class vehicle.
My next point here is not meant to be controversial, so just please don't take, all my European friends and colleagues, don't take offense to this comment, but this is kind of like the best way I could summarize it. It feels like Europe thinks it's 2015 with respect to launch. There's a number of small launch vehicles in development which was the case obviously in 2015, and there's kind of a reluctance to move into reusability and it still very much feels like it's a government dominated domain, which if we all roll the clock back to 2015, it feels a lot the same. So not meant to be a criticism by any stretch, but whenever I go to Europe and talk to friends and colleagues over there, it really feels like I've gone back to 2015.
Obviously, we've seen super heavy launch vehicles arrive at the pad, which is super awesome. But I also remind everybody that they're great for particular purposes but they don't solve every problem. And much like when rideshare missions first came out, I think most people thought that would be the end of small launch, but in fact it wasn't at all. Small launch has continued to grow and grow and every year we sign more and more deals and do more and more launches. And that's fundamentally because there's different requirements for different needs. So if you have a 300 kg satellite or a 5 ton satellite, it's of no use to you to put it on a rocket that lifts 100 tons or more if you've got to go to a specific orbit. So super heavies are going to be amazing for interplanetary and a whole bunch of cool stuff, but I don't subscribe to the view that that just destroys all launch all down the chain. I kind of think of it like an A380 and Electron as an example at the other end of the spectrum is like a private jet. They both have distinct purposes and distinct needs and one doesn't replace the other. But nevertheless, super exciting to see.
The one thing I guess that we've certainly felt and seen is that having your own launch site is more important than ever. And we created that Mahia Peninsula launch site down in New Zealand and I think at the time a lot of people were wondering what we were doing and thought that we built a launch site in New Zealand because Pete's a New Zealander and he quite likes it down there. But the opposite for that reason, we built that launch site so that we could be in complete control of our launch cadence and the demand that would bring. And you see a lot of government ranges really starting to get quite congested and if you map out all the launch that's required and where they're going to go, you can see why we went to Wallops and made some compromises there just to try and solve some of that launch cadence problem. So I think that's been very obvious and friends over at SpaceX have felt themselves all the advantages of owning their own launch site, well and quite frankly some of the disadvantages.
So if we move on, obviously as a company we also do a lot of satellite work, so I thought it might be interesting to touch on the state of satellite manufacturing. I guess one of the biggest takeaways for me anyway is that the default in spacecraft now is lots. If we all go back a few years, at the conference when Planet launched 300 spacecraft, it all felt like a tremendous number of spacecraft at the time. But now 300 is pretty normal, nobody gets freaked out when they say I want to build 300 spacecraft. It's 3,000, 30,000, then that starts to get to a more significant number. But that's very much kind of the default, not to say that there's not requirements for smaller numbers and bespoke elements, but that's the number one takeaway for me is that large constellations are the default now.
That creates interesting problems for the supply chain and I think everybody knows that Rocket Lab is very vertically integrated and sometimes we do vertical integration not because we have a religion about it, it's just that the supply chain just isn't there to be able to provide it. There's a number of occasions where I'd just rather buy something and it just turn up, but the reality is that often doesn't happen. So I think that in the industry right now is something that we're all grappling with. And as a result, scale within that supply chain is desperately needed. If you look across a lot of suppliers, a lot of suppliers are very small shops that do absolutely exquisite work, but the scaling piece is just so ridiculously difficult. And there's a kind of a baseline of infrastructure that you have to put in place to be able to scale, you know, ERP systems, MRP systems and finance systems and all the boring stuff that nobody likes to talk about. But this kind of baseline infrastructure is super expensive and you end up in these tricky situations where you need to put that investment in that baseline infrastructure but your volumes or your return is not high enough to be able to warrant it. So there's kind of a valley of death between small and large scale that's really challenging to walk through. And we've walked through it a number of times and it hurts equally as much every time.
But what that does mean is that you're starting to see a bunch of just pure play components companies that have scale, whether it be optical terminals or a whole bunch of stuff, right, where there's enough scale that you can just focus on one thing. And I think back, a lot of the small companies typically wouldn't have one product, they would have to have a whole portfolio of products because the volume of one product in itself just wasn't enough to build a sustainable business. So I think you're seeing a bit more specialization in singular components at scale, which is excellent. But yeah, I think one of the things that we're certainly focusing on is there's always going to be the need for one-offs and very tailored components, but more standardization across the industry is occurring. And one of the things I've challenged the team with is I want to have one of everything, at least one of everything in stock at any time. So whether it's an Electron rocket at the extreme end or just a reaction wheel, we want to have one of everything on the shelf so that when someone calls up we can just ship it. And anybody outside the space industry, that's just kind of normal, but obviously within the space industry the scale hasn't been there to make that worth people's while. So I know that others are following that same model, but that's the challenge I've set down for the team.
So sort of straying into areas that I'm certainly not an expert on here, but as we look across the industry, and obviously we make no hiding of the fact that we're trying to build this end-to-end space company that includes an application. So kind of my view across the state of play within applications from space is it kind of boils down to two main ones. Obviously there's a tremendous amount of stuff at various scales in between, but if we look at Earth observation for example, and heavily caveat this, I'm not an expert in Earth observation, these are just my musings of what I've seen. But it's clear that the demand for the imagery and the insights keeps growing and growing and growing and that's awesome. But it almost in some respects feels like the race is won. You don't see a whole bunch of new Earth observation companies starting up and being funded, certainly not in the numbers that we used to see say five or ten years ago. And I try to scratch my head and think why is that, especially when demand is increasing. And when I talk to various investors, one of the comments that's made to me is like we've yet to see the scale, where is the multi-billion dollar scales of the Earth observation market. Don't get me wrong, a lot of people have scaled well and done well, but there was always this promise of just huge scale in that Earth observation market and I think that's yet to occur, which in some respects is exciting because it says that there's more opportunity there, but it feels somewhat that that's the case.
And then of course the big bucket and the elephant in the room is communications. And it's all about internet and direct-to-device. Of course there's other applications of bent pipes and IoT and all the rest of it, but internet and direct-to-device really drown out everything else. And as you stand back and you look at that, it's an application that just requires tremendous scale. That's a pretty hard thing to go and do, is build hundreds if not thousands of satellites and launch them and provide a scaled solution on orbit. And I'm sure smart people will figure out ways of doing it with kind of less scale. And you see the more traditional and heritage players really struggling with the disruptors because they've had nice businesses for quite some time and then all of a sudden there's a new player in town that can just deploy infrastructure at a pace and a cost that's very hard to match.
And then it kind of brings me to the last point in this, and I've said this many times, that if you think about the future end-to-end space companies, which are ultimately going to be the really large behemoth space companies of the industry, it's going to be a little bit blurry about are they a space company or are they not a space company. Because I think to be competitive and successful, you really have to have your own rocket, have the ability to build your own satellites at scale, which generally means you have to have a lot of vertical integration to do that at the right price point, and you just have to be able to launch relentlessly on demand to firstly deploy the infrastructure and then maintain it. So especially in the comms world, as I stand back, it's going to, like I said, it's going to become really blurry about is this a space company or is this an applications company, because you sort of need both to be competitive in this industry right now.
Then if we take a look at the funding environment. Look, the SPAC frenzy was a crazy, crazy time. And truthfully, a lot of companies went public that just should not have. I think a general rule of thumb, if you don't have a product and you don't have revenue, probably best not to go on IPO. And a lot of those companies that did IPO, they weren't successful in raising private capital, so it was kind of the only option left open to them. Now of course there's a number of companies that this doesn't apply to, but I think we have seen the kind of the winnowing of those successful companies and those less successful companies. The great thing about the public markets is they're very efficient, it's very digital. If you do a good job you get rewarded, if you don't you get penalized. And you can't kind of make excuses in a boardroom, the public markets are pretty ruthless. So what we've ended up seeing is the remaining businesses that are sustainable and kind of the great filter has largely been applied. And that whole thing was crazy, but actually fantastic for the space industry because it injected large amounts of capital into the industry, amounts of capital that for many companies had never been seen before, certainly from a Rocket Lab perspective, and enabled companies with well organized teams and well organized plans to really move forward in a big way. So I think it was net net great for the space industry.
But as the dust is sort of all settling on that, and I should be clear as well, it wasn't just the companies that SPAC'd, it was tremendously frothy around that time and a lot of private companies got funding for projects that I kind of looked a bit cross-eyed at and thinking what on earth is going on here. And also large quantums of capital, which at the end of the day, you can look at it two ways, one is what a waste of capital, but I generally believe that even into silly ideas, great people were developed, new technologies were developed, so it wasn't a total loss in most cases. But as the dust settles from all of that, I think what you've ended up with is a much higher quality of company across the board, both public and private. And the funding markets are certainly starting to pick up again and it's great to see some IPOs and also some new private companies getting good funding rounds of some level of scale in the hundreds of millions of dollars again. And that's all great, but what I would say is that investors are far more discerning this time. It used to be that if you had a SpaceX CV and an idea you could go and raise money, well not anymore. There's a lot more, people got pretty burned and lost a lot of money, so there's a lot more diligence and people are a lot more careful about what they invest in. But the good news is that for great teams and great ideas, there is plenty of capital available to go and build good companies.
So I'm straying into danger territory here, but I'll keep it brief. When you think about the state of strategy and leadership, especially as it applies to the United States, space is clearly a priority within the new administration and that's good for us all. And so I think that's very exciting and incredibly positive. I think there's also a much stronger focus and a renewed energy around value, so value for money, value to the taxpayers, and execution and getting things done quickly. And I think if you're a legacy player who is locked in on cost-plus contracts, it's going to be a little bit of a disruptive time. If you're an innovative company that is willing to take a bit of risk and do firm fixed price and put a bit of your own risk on the line and execute, this is going to be a great time because I think there's going to be tremendous amount of opportunities to get stuff done. I think there'll be more willingness to leverage commercial capability than ever before. Projects like Mars sample return are a great example. I think that's an opportunity for the government to save tremendous amount of capital and taxpayers money to go after projects that the commercial industry is ready to go and do. And so I think that's a tremendous opportunity for us all.
And obviously in an uncertain world, defense continues to grow and be more and more important. We've seen announcements of new very large programs, obviously things like SDA are going to play an important role. So I think defense is going to be an area where it's going to have continued and in some cases renewed focus. And I don't know about everybody's companies in the audience, but if I look at Rocket Lab, we're sort of 50/50, 50% defense and 50% commercial. And then even when we kind of peel the layer of our commercial customers and look at them, they're over 50% defense in their own right. So it represents a tremendous portion of the industry and having a more focus on that and more growth in that is going to be good for us all. I also think it's the best time in history to be bold. I think being bold with bold ideas and bold opportunities in this environment is going to be well rewarded. So I feel like there's a lot of permission given to think differently and to be bold with space exploration. So I think that is going to be exciting and clearly Mars is a priority as well and on the table.
So this is where it gets really dodgy and if there's one slide I want everybody to forget, it will be this because I can guarantee you it will be wrong. But as I sit down over a glass of wine in isolation, these were kind of my thoughts and predictions for 2025. So I think we've already started to see it, but I think there's going to be a bit of consolidation of legacy players. I think the environment within the space industry continues to move in a more commercial direction and in a less kind of government subsidized kind of approach. So in order to be competitive, I think there'll be some consolidation and some change within some of the larger legacy players and I don't think that's a surprise to anybody.
I also think in the same sense there'll be some consolidation in the small and medium size companies as well. Not necessarily for the reasons you might think. I mean, if you're a small company and someone turns up and gives you a giant order for something, as I was saying before, it's really hard to build the base infrastructure to be able to scale and scale quickly. So one of the ways you can do that is combine with a company that already has that scale and that infrastructure and create value for both parties. So I think those kinds of decisions and weighing will be made more often. And then same on the mid-scale, I think if you want to become a large company, it's always an option to combine a few mid-caps together to build something a little bit bigger and gain the efficiencies there. And look, there'll be some companies that really struggle and for whatever reason, that may have amazing teams and amazing products, but just haven't been able to execute. And I think there's opportunities there for some good consolidation across the industry.
Whether we like it or not, I think China has begun to come much more competitive and they're going to continue to push a lot of resources into space. I just think over the last even five years, the vehicles being developed, human spaceflight is regular, space stations exist, moon landing on the moon plans are well put together, and technologies are evolving. Outside the United States, the most active country doing reusable rockets is China. So I think China is going to continue to become more and more competitive, they're throwing everything at it, and space is going to become much more politically contested. So that's going to be an interesting and a challenge I think for everybody.
And I don't, this next point I certainly don't mean to be controversial here either, but it's just actually the law of averages. I think there'll be one or two rocket companies fail this year, as they have just about every year for that matter. And I think as time goes on and more established providers get more established, the bar to entry just continues to raise and the ability to be disrupted gets harder and harder. And I think there's still a few companies that are hanging on that ultimately I think you'll see the end of this year. And that's sad, but that's kind of the reality of things.
Clearly Mars is going to get a lot of attention and we're particularly excited about that. I would certainly, as everybody knows me, would hope that Venus would get a little bit more attention. But I think this is certainly going to be the focus and I think there'll be a lot of really formative plans put in place with some real teeth that we'll see a tangible probability of a footprint on the surface of Mars, which I think we're all excited about.
And then finally, as I kind of sit there and think about this year versus other years and is this a good year or a bad year, look, I'm super bullish. There's going to be a bunch of really cool stuff happen this year and I think 2025 is one of the most exciting years in space. Yep, there's a few things that have got turned on the head, there's new opportunities abound, but the one thing that's for sure is there is tremendous opportunities, there's tremendous growth in the industry. It's certainly not stagnating, it's not going backwards, it's continuing to scale. In some areas it's getting harder to scale and other areas it's getting easier to scale, but no way to cut it anything other than it is a super exciting time. And I think 2025 is going to be a really big year for everybody in space. So with that, I'll hand it back over and like I said, reserve the right to be completely wrong on all of this, but hope everybody enjoyed my kind of view on the industry.
