Space startup Orbex secures $25M from the UK government to take on SpaceX

The UK government is investing £20 million ($24.8 million) in Orbex Space, a Scottish space startup aiming to compete with Elon Musk’s SpaceX. The funding, part of a larger round Orbex is raising, was announced at the European Space Conference in Brussels.

Orbex has already secured £23 million from investors including Denmark’s Export & Investment Fund, Octopus Ventures, and former Informatica CEO Sohaib Abbasi.

This isn’t the UK’s first move in the space sector. The government also holds a stake in Eutelsat OneWeb, formed through a 2023 merger. It originally backed OneWeb in 2020 as part of a $1 billion rescue deal with India’s Bharti Group.

With this funding, Orbex joins a growing list of European space startups aiming to challenge SpaceX. Among them is The Exploration Company, which secured $160 million in November to develop reusable capsules designed to position Europe as a serious competitor in the space industry.

What is Orbex Space?

Orbex develops small and medium-sized rockets powered by bio-propane, a renewable fuel. The company plans to launch its first rocket, Prime, by late 2025. At 19 meters long, Prime is designed to carry small satellites into low-Earth orbit.

The UK government says supporting Orbex is part of its goal to establish regular rocket launches from British soil.

British Tech Minister Peter Kyle said backing Orbex will help boost the country’s position in the space industry. Orbex CEO Phillip Chambers called the investment a vote of confidence in the UK’s rocket manufacturing and launch sector, CNBC reported.

Supporting Orbex will help “turbocharge the country’s position in the space sector.” He added that the funding allows the UK to launch its first rocket this year and move forward with a larger rocket to compete in the European Launcher Challenge.

“This investment paves the way not only for us to launch our first rocket this year but also to develop a larger rocket to enable us to compete in the European Launcher Challenge,” Chambers said. “These development goals are crucial to our longer-term development,” he added.

The SpaceX of Europe?

Orbex isn’t the only company looking to shake up the industry. Skyrora, another UK-based space firm, told CNBC it plans to launch satellites from the UK this year. Meanwhile, Germany’s Rocket Factory Augsburg (RFA) is targeting a UK launch in 2025.

All three specialize in microlaunchers, smaller rockets built for lighter payloads. Orbex emphasizes sustainability, claiming its Prime rocket produces up to 96% fewer carbon emissions than traditional fossil-fuel launch systems, according to a 2021 University of Exeter study.

RFA CEO Stefan Tweraser told CNBC last week that Europe needs to develop its own space capabilities, calling it a priority for the region’s strategic future.

With government backing and a growing space sector, the UK is positioning itself as a serious player in satellite launches—but whether Orbex can compete with SpaceX remains to be seen.