Founded in 2002, Space Technologies Corp. pioneered a brand-new industry. Starting with no competitors, no customers and no market, the small spaceflight company aimed to bolster demand for commercial spaceflight.
SpaceX has spent the last 24 years making that goal a reality, creating the first commercial spacecraft to orbit and return to Earth. The company developed and launched a private network of internet satellites that rivals the U.S.’s own constellation. And in June, SpaceX went public on the Nasdaq, trading at $150 a share and debuting with a valuation of nearly $1.8 trillion.
Growth in commercial space travel follows the pattern of any other developing industry. A breakthrough, like SpaceX’s reusable rockets, triggers a cycle of new companies taking on subsequent innovations – and thus a new generation of entrepreneurs emerges.
That’s how SpaceX birthed 148-and-counting startups led by former engineers, product designers and scientists who once helped the company move the needle. As of August 12, SpaceX alumni have raised $15.6 billion to help scale their firms, according to alumnifounders.com. While SpaceX moved its headquarters from Hawthorne to South Texas in 2024, it cemented its legacy in California – more than 63% of companies spawned out of SpaceX are based in the Golden State, with the lion’s share in Southern California.
These companies are rapidly developing, armed with billions of dollars in government and private funding. But the market for commercial space travel is still in its early stages, and the startups are taking on the next mission in space tech — exploring what can be built in the outer universe.
Varda Space Industries: The market for microgravity
For Michael Reilly, utilizing space for the pharmaceutical sector was not an out-of-this-world idea. When he worked at Amgen Inc., a pharmaceutical prototype for osteoporosis was sent to the International Space Station to support research on how gravity affects bone health. Because the vacuum of space affects bone and muscle growth, space became a playground for studying accelerated aging.
“Bone degrades; muscles degrade when you are up in space. And so, we were able to take advantage of that to create an accelerated model of osteoporosis and test osteoporosis drugs,” said Reilly, the chief strategy officer at Varda Space Industries, an El Segundo-based pharmaceutical company that manufactures drugs in space. “…we have decades now of experiments going on up there.”
Much like how refrigeration allows the pharmaceutical industry to crystallize ingredients by controlling temperature, Varda gives the drug manufacturing process the variable of microgravity. The company places active pharmaceutical ingredients into a dishwasher-sized spacecraft. It then launches it into space, where it can rattle and shake, allowing the drug to crystallize without the burden of gravity. The spacecraft then lands in South Australia, where the ingredient mixture is used in medicine.
Tapping into Earth’s weakening gravity allows active ingredients to crystallize in a way that improves the drug’s shelf life, bioavailability or manufacturing scalability.
The company was founded in 2021 by venture capitalist Delian Asparouhov and former SpaceX engineer and spacecraft operator Will Bruey. Varda borrows from its predecessor, launching its spacecraft on the SpaceX Falcon 9, a partially reusable rocket that significantly reduces the manufacturing cost of each launch by preserving the booster.
“The only reason Varda is possible now is because shipping to space has become just shipping,” Bruey told the Business Journal last year. “There are Falcon 9 launches and SpaceX launches multiple times per week, and we’re developing capsules so that shipping to space and shipping back is just shipping.”
Companies like Varda exist because access to space has become inexpensive. A handful of in-space manufacturing companies have emerged in recent years to develop materials in Earth’s microgravity that would otherwise be difficult to produce on Earth. Though Varda is working on drugs, other companies are crystallizing materials for fiber optic cables and organic tissue matter.
“There are other ways of creating new formulations on Earth,” Reilly said. “We have to show that this is better. We need to show it’s worth the trouble of sending things to orbit.”
K2: Establishing the infrastructure
The advent of high-power internet satellites quickly became the backbone of connectivity, from navigation maps to instant messaging. It’s a piece of infrastructure that Russia, the European Union, and the U.S. have invested in to secure online access in their respective countries. Despite the national force behind these endeavors, Starlink, SpaceX’s satellite internet arm, far outpaces any of these countries. SpaceX manages a constellation of around 10,000 internet satellites.
“Historically, the only signal that was sent from space was GPS and TV. The ability to do high-speed internet is directly a product of the power per satellite going up,” Karan Kunjur, the co-founder and chief executive of K2 Space Corp., told the Business Journal in December. “As your power per satellite goes up, you can generate a stronger signal. You can have greater throughput. So you can have higher speed applications, high speed internet.”
What SpaceX did for spaceflight is what K2 Space wants to do for satellites.
K2 was founded by Karan and his brother Neel, who worked at SpaceX as an avionics systems engineer. K2 Space’s plan goes against what much of satellite manufacturing looked like for the last few decades. Most manufacturers have been shrinking the size and weight of these satellites to curb prohibitive launch costs. But the Torrance-based company is building the same expansive satellites made by the legacy players decades ago – but for cheap.
“The core foundational idea is, let’s figure out how to deploy a lot of capability very quickly in space, and do so at a low cost so that we can kind of help humanity explore and develop,” Kunjur said.
The company launched Gravitas, its first satellite generating 20 kilowatts of power, in March. Gravitas is meant to rival large commercial satellites built by competitors like The Boeing Co. that provide support for consumer internet and military defense use cases. K2 is working to unveil its next model, a 100-kilowatt satellite called Giga, in 2028.
K2 Space’s idea for large satellites raised $500 million in series D funding in early August, catapulting the company’s valuation to $6.8 billion. The company’s strategy leans on its other neighboring companies building large rockets – like Starship, SpaceX’s newest rocket capable of carrying 100 metric tons into orbit – and launch costs falling.
“There are not many places where the talent pool is so deep to go off and build hardware and space companies the way we’re building,” Kunjur said. “You combine that talent pool with capital coming in and Los Angeles becomes a really interesting place to build an aerospace company.”
Fortastra: Defending your property
As the cost of space travel decreases and more enterprises launch satellites, solar observers and sensors into space, the expansive, boundaryless void that is the universe is becoming increasingly disputed.
“We didn’t need to worry about defending our things in space because it was really hard to get there and it was also really hard to operate there,” said Michael Smayda, founder and chief executive of Fortastra Corp. “That’s just not the reality moving forward in the same way as it used to be. And space is continuing to become more contested.”
Smayda founded Torrance-based Fortastra in 2025 to develop a spacecraft that can maneuver through space, assess its environment, and take action. He spent a year as an aerodynamics engineer at SpaceX, as it worked to improve the cost of launching a rocket into the atmosphere.
“Taking a step back and looking at what the launch market is doing for space, it became pretty clear to me that we’re going to see a lot more infrastructure in space than we’ve had in the past,” Smayda said. “Mass and volume are less of a constraint going to orbit. Things that currently only make sense on the ground are going to start to make sense in space for various reasons.”
The company announced in late July it would partner with a neighboring manufacturing startup, Torrance-based Hadrian Automation Inc., to reduce the cost and size of Fortastra’s spacecraft through logistics.
Smayda compared it to every other piece of property on Earth, where buildings are armed with cameras, alarms and security guards. In space, governments have installed constellations of satellites to observe the Earth and collect climate change data or provide the backbone of the internet for countries with poor infrastructure. Space is a national security priority for the U.S., which operates the largest network of internet satellites.
“Satellite defense today, I’d argue, is primarily a government problem. But it’s more a question of when versus if this becomes equally, if not more so, a commercial problem. Because the number of commercial spacecrafts that are up there is tremendous,” Smayda said. “Ten to 15 years down the road, it might actually be more a commercial business than a defense business.”
Impulse Space: Staying grounded
Eric Romo wants the space sector to come back to Earth.
Romo, the president and chief operating officer of the Redondo Beach-based spacecraft manufacturer Impulse Space Inc., was the 13th employee at SpaceX before he left in 2004. After various stints building a solar energy company and a virtual reality startup, and overseeing experimental projects at Meta Platforms Inc., he finally turned back to space in 2023 when he joined Impulse Space.
“Space was one of the things on the list of, ‘hey there seems to be something going on here again,’” Romo said. “I had largely ignored it for almost 20 years.”
At that point, the industry underwent a dramatic shift. By the time Romo came back to commercial space, the industry had ballooned to around 800 companies in the U.S. alone, compared to the 30 stealth startups that existed alongside SpaceX’s early years. With that boom came billions of funding – space technology has raised $8.2 billion in venture capital funding alone in 2026, according to Pitchbook.
But Romo doesn’t expect it to last. Despite space technology’s moment in the limelight, the industry is still rather nascent and speculative. Even SpaceX’s stock price fluctuated wildly following its record-breaking IPO, dropping 22% since it went public two months ago.
“I know that the winds change really quickly in the startup fundraising environments. And so, it’s been really important to us to build the business quickly. It’s been a really important task to be well-capitalized,” Romo said. “Part of raising $500 million a couple of months ago was how to make sure we’re strong in the event that something does change.”
The $500 million series D the company raised in August put the company at more than $1 billion in venture capital. Impulse has signed around $400 million and counting in contracts with the U.S. military, as well as a handful of commercial partners. The goal is to keep Impulse Space, which designs space tugs to move cargo from one part of space to another once it has already left Earth, grounded by signing contracts with an obvious payer.
“I’m one of the more bearish people you’ll meet in space, I think,” Romo said. “I think the challenge is these concepts are so exciting – the things that you do on the ground and could do – that we get captivated by that excitement, by the fantastical nature of it, by the sci-fi vision of it. The reality is it’s still extremely expensive to send things to space.”
