One day, constellations of cheap, efficient, small satellites could provide blanket coverage for real-time imagery and global broadband internet. Image source: Getty Images.

It's been just three short months since we introduced you to Vector Space Systems, the tiny space start-up that's shaking up the global market for satellite launches. And now, Vector is back in the news with a big new contract.

Remind me: Who is Vector Space exactly?

As we discussed back in May, Vector Space Systems is the new rocket maker founded by space-industry veteran and SpaceX alum Jim Cantrell. But whereas SpaceX focuses on cutting the cost of launching large commercial and government satellites by 75% -- and stealing that business away from incumbents Boeing (BA -0.24%), Lockheed Martin (LMT 1.71%), and Airbus (EADSY) -- Cantrell and Vector have a different plan in mind.

They're going to create an entirely new market for launching smaller "microsatellites" into space -- at about $2 million a pop.

Welcome to the future

If you thought those promises sounded pie-in-the-sky three months ago, well, today they're already starting to bear fruit. Last month, Vector announced it had acquired its partner, Garvey Spacecraft Corporation, bringing in-house the latter's proprietary small-satellite launch vehicle, which will henceforth be dubbed "Wolverine." At 36 feet tall, and weighing 1,500 pounds, Wolverine will be a rocket ship purpose-built to loft 100-pound microsatellites into orbit 120 miles above Earth (or to send 55-pounders up 240 miles, as the customer prefers).

With this rocket in hand, Vector is ready to begin taking orders for putting small microsatellites in orbit -- and in fact, Vector announced its first paying customer just a couple of weeks ago.

As explained in a press release, Finnish satellite-imagery company Iceye signed up to launch a constellation of 21 small synthetic aperture radar satellites into orbit aboard Vector Space rockets. Each sat will go up on its very own rocket, to be delivered to a custom-picked altitude and orbital trajectory. And because Iceye is buying in bulk, and in advance (deliveries will begin in 2018), it's getting the best rates Vector has to offer -- somewhere on the order of $20 million to $30 million for the entire project.

(To put that number in context, even $30 million will be less than half the cost of launching a single SpaceX Falcon 9 launch vehicle -- and less than 20% of what Boeing and Lockheed charge for an Atlas V launch, or what Airbus subsidiary Arianespace charges for its Ariane 5.)

Why Vector Space?

Granted, these larger rockets can carry multiple microsatellites per launch -- or even squeeze in a few microsats while delivering larger satellites for larger customers. But that's not what the large rockets are built for, and to fit their smaller satellites aboard, satellite makers must often make concessions on design.

For example, Iceye will actually send up its prototype satellite in 2017, hitching a ride aboard a SpaceX Falcon 9 carrying larger cargo. But to fit itself aboard the rocket, Iceye had to change the satellite's "configuration." In contrast, Vector is working with Iceye to enable the configuration it really wants. That flexibility helped to convince Iceye to give Vector the bulk of its business.

How big can this business grow?

Iceye's 21 satellites are just the start of this story. Vector says, if all goes well with the initial launches, Iceye may order even more -- sending up as many as 30 operational satellites, plus a couple of spares.

And Iceye is just one customer. Already, Vector is in talks with four other potential customers, and moving rapidly toward a "full manifest" -- having as many paying customers as it can build rockets for. Cantrell tells me he expects to launch anywhere from seven to 10 of Iceye's satellites in Vector's first year of operations, 2018. Launches will ramp up to a dozen (from all customers) in 2019, 30 in 2020, and continue growing rapidly from there, toward a maximum of perhaps 150 launches per year. 

For context, Cantrell predicts that between 2015 and 2020, the global market for small-satellite launches will expand from 18 to nearly 260 launches. Thus, Vector Space is targeting a 12% market share in a market growing at 70% -- and an 86% annual growth rate for itself.

What's this market worth?

At an average per-sat launch cost of $2 million, that works out to perhaps $14 million in revenue in Vector Space's first year of operations, $60 million two years later, and something on the order of $300 million annually once the company hits its projected peak rate of 150 launches per year. Total growth expected: better than 2,000% in launch volume, with sales growing even quicker than that, as the company adds new services and larger, more expensive launches.

Such blue-skies growth prospects would make even SpaceX envious, to say nothing of staid ol' United Launch Alliance and Arianespace. Now all we need to figure out is a way to invest in Vector Space.