By 2035, the World Economic Forum and McKinsey & Company expect the global space economy to reach $1.8 trillion. The White House recently released its National Space Transportation Policy, which calls for the US to support more than 1,000 launches and reentries annually by 2030. Meanwhile, SpaceX has reportedly stopped accepting bookings for its Transporter and Bandwagon rideshare missions beyond late 2028. Global launch demand is increasing rapidly, and capacity is becoming a bottleneck.
Canada is the only G7 country remaining without sovereign access to space. If Canada wishes to launch a satellite, it must rely on a foreign partner (primarily the United States). This concern has led the Canadian government to list space as a key sovereign capability in the Defence Industrial Strategy (DIS).
Budget 2025 committed $182.6 million over three years to the Department of National Defence (DND) to establish sovereign launch capability, including a $105-million multi-year grant program supporting Canadian-designed launch vehicles and related technologies.
“Demand is going to be almost 300x over the next 10 years.” — Hugh Kolias, Founder and CEO of Canada Rocket Company
Canada Rocket Company sees this moment as an opportunity to develop a sovereign and globally competitive medium-lift launch capability from Canadian soil. The mission is to make Canada a launch provider for the world’s middle powers. CRC emerged from stealth in January 2026 and has since raised $22.5 million in total capital, assembling a team of 32 from companies including SpaceX, Blue Origin, Rocket Lab, ArianeGroup and Tesla. It has recently begun planning a 500,000-square-foot manufacturing facility.
“Once you own the rails to space, you really have this call option on the business.”
The team is concentrating on the R-2, a reusable Falcon 9-class medium-lift rocket powered by liquid oxygen and methane. The vehicle targets a payload of 12,500 kilograms to sun-synchronous orbit (SSO). Canada Rocket Company believes medium lift represents a much larger global opportunity than the crowded small-launch market. Capital is the immediate bottleneck. Canada Rocket Company estimates that it needs roughly eight years and $500 million to develop this capability.
“At the end of the day, it is more of a capital problem than it is a technical or engineering problem.”
Hugh Kolias is the CEO and founder of Canada Rocket Company. He previously sold Yuhu in 2022, a multifamily-property SaaS platform, and is now returning to the space ambitions that brought him into engineering in the first place. Hugh believes that by demonstrating intense ambition from Canada, he can build a talent advantage and turn Canadian brain drain into brain gain.
“I would love to see a Canadian launch vehicle take a Canadian lander that goes to the Moon and helps build out lunar permanence.”
In Explorer Spotlight #14, I spoke with Hugh about why CRC is moving directly toward medium lift, what it takes to finance a Canadian rocket company, lunar permanence, dreaming big, and how an ambitious mission can reverse Canada’s brain drain.
“The more ambitious you are, the more people will match that ambition.”
What is Canada Rocket Company building, and why does it matter for Canada?
“Canada Rocket Company is building a Falcon 9-class launch vehicle for Canada. That matters from a sovereignty perspective: Canada and its allies need access to space. It also matters from an economic perspective. It represents over half a billion dollars in investment and more than 1,000 jobs, all in engineering and advanced manufacturing. It is a dual-track benefit for the nation.”
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You built and sold a SaaS company, Yuhu. Can you explain what it was, and how different it is from building a Canadian space company?
“Yuhu was a multifamily SaaS platform before AI was a thing. We provided an end-to-end service, essentially tip-to-tail, from prospects and leasing through to residents within apartment buildings. We were the operational layer behind the scenes: processing payments and helping sign leases. We had over 200,000 apartment units across Canada. Building a rocket company is similar, but different.
The similarity is that it’s all about building a team: happy people build happy rockets, and it was the same on the software side. It’s about attracting the best people globally. The obvious difference is that this is highly capital-intensive: about half a billion dollars over eight to ten years. With SaaS and software, in theory, you just need a couple of people in a garage or, at this point, Claude, which you can leverage on the engineering and development side. Ultimately, it’s about building an MVP (minimum viable product). For us, our minimum viable product is building a vehicle that can get to orbit and can service both the national and commercial needs. That’s why we’re building a Falcon 9-class vehicle, capable of carrying roughly 12,500 kilograms to sun-synchronous orbit. It is very similar in thrust class and size to Falcon 9. As SpaceX retires Falcon 9 in favour of Starship, there is a huge global opportunity to fill that void. Outside the US, there aren’t any credible replacements at the moment. Most of them are expendable and large government programs. It is a huge opportunity for Canada, not only to address its sovereignty needs, but to build the next Shopify, except providing rides to space.”
What makes this moment right for Canada Rocket Company?
“At first, the whole world assumed launch costs would go down to, Elon says, $10 per kilogram or something wild. But interestingly enough, in the last six to 12 months, the opposite has been happening: demand is going to be almost 300x over the next 10 years. This demand is partly from orbital data centers, but a lot is from sovereign constellation sets from countries and the lunar missions over the next decade; I think it’s like 70 or 80 launches that are estimated.
All of that demand, combined with underinvestment in launch, has created this perfect storm: there’s a massive commercial need for vehicles of this size. No one’s been investing in them over the last 10 years because everyone thought light-lift or smaller vehicles would be complementary to SpaceX.
But it turns out those business models don’t really work, and don’t work from a venture-scale perspective, because your operating costs are effectively the same across both vehicles; the amount of mass that you can take directly relates to how much revenue you generate per vehicle. And it becomes very difficult to create a venture-sized or venture-scale outcome. Then you couple that with the sovereignty movement of decoupling from the US and essentially focusing on that middle-powers initiative. You have these two tailwinds pushing in the same direction. When I saw everything coming together, I thought: who doesn’t want to build rockets? This was like a once-in-a-lifetime opportunity. Doing it in Canada is almost unheard of. Canada is actually the place to build this because we’ll effectively be the first company in a nation that really wants this capability. Therefore, there are a lot of advantages in terms of accelerating legislation.
We got temporary foreign worker permits accelerated for us as well. That is important because no one in Canada has built a launch vehicle before. We have to bring in that expertise and use it to train Canadians over the next decade. So we really couldn’t have built this anywhere else. It’s like a big, audacious, hairy thing to go after. Everything fell into place. Now that everyone’s talking about orbital data centers, it turbocharges the need for launch globally. And it’s just really cool to be able to do that in Canada, where historically, we have been okay with partnering with NASA or the US or the European Space Agency. We’re still partnering with them, don’t get me wrong, but this has opened up the ability to pursue something ambitious.”
What is CRC’s product lineup?
“We’ve simplified our roadmap. We’re really just focusing on the R-2; we’ve upsized that vehicle. When we first looked at the idea, we thought 6,000 kilograms to orbit was the right number. That seems to be the sweet spot where there’s decent constellation activity, because you don’t want to compete with a Falcon 9; you want to be complementary. The average utilization of a Falcon 9 fairing is about 3,000 to 4,000 kilograms, but that is mainly because it’s also volume-limited. We’re making sure our vehicle is wide enough to accommodate other payload requirements to utilize our mass capabilities further. We’re going to start with and end with the R-2. Simplicity is really important.
You need roughly half a billion dollars to get a medium-lift vehicle to orbit. That’s where we have high confidence, given the tailwinds globally, in terms of this being a massive market opportunity, but also within the Canadian ecosystem. There are a lot of initiatives at the federal and provincial levels, as well as within the venture ecosystem, supporting something like this. Six months ago, I think it would have been absolutely impossible.
We haven’t publicly announced it, but internally, we’re focused on that medium lift design, because that’s what the government wants. That’s what we strongly believe is required to make this venture investable, and all of our engineers agree. We’ve spoken with 150-plus engineers around the world who have worked on orbital launch programs, and every single one has said to build the end product that you want to use and don’t waste your time with the suborbital or smaller vehicles, because you’re not de-risking as much as you think you are. At the end of the day, it’s more of a capital problem than it is a technical or engineering problem.”
Why skip light lift?
“As we talked with more engineers globally, and as we saw the needs shift: when we started, data centres in space were being discussed, but they were not a major focal area, and SpaceX had not yet announced that they were bringing down the cadence of Falcon 9 flights, eventually retiring it and stopping rideshare flights. The market also dramatically shifted over the last six months, which made building a Falcon 9 equivalent vehicle make sense, not just in the Canadian context, because the Canadian market likely isn’t large enough to sustain a singular provider.
You’ve got to go international if you want to grow a massive company; Shopify is a great example of that. We have such a huge opportunity, both because we’re politically stable and because people love trading with Canada. So if we can provide and be the de facto service for the middle powers, we’ll also get overflow from the US. As much as people talk about us tussling, at the end of the day, there are going to be substantial market needs based on the growth rate of payloads, constellations, and lunar missions. There’s not enough launch capacity globally. A lot of payload operators don’t really care where you’re situated, as long as you have the product, you’ve got the reliability, you’ve got the scheduling or the cadence, and your economics make sense. The world needs a Falcon 9 equivalent. We’re going to build in reusability and leverage customer-driven, customer-purchased flights to work on the reusability components. That lowers the balance-sheet risk and allows us to bring in a world-class team that has seen it and done it before. Then we execute, which is what we’ve been doing for only seven months. We’ve raised $22.5 million and built a team of 30; most are relocating internationally and have worked on global launch programs.”
What is the difference between light, medium, heavy and super-heavy launch?
“To use a transportation analogy, you’ve got your Uber parcel point-to-point delivery. Then you’ve got maybe a semi-truck, and then you’ve got a cargo plane. That would be the delta between light, medium and heavy lift. Then super heavy would be massive; it’s like a skyscraper that’s going to space. So really, it’s all about finding what fits the market. As an example, Telesat Lightspeed: each of the satellite buses is plus or minus, let’s just say, 800 kilograms. So a light-lift vehicle capable of carrying 1,000 kilograms could take one Telesat Lightspeed satellite bus up at a time. But that’s really inefficient because you’re going to spend more dollars per kilogram or per satellite, and it’s going to take you years to send up 150, or however large their constellation set is. It would be like Apple shipping iPhones using small cars and small boats around the world, shipping one iPhone at a time versus taking large pallets and sending them to distribution centers.
Economies of scale, obviously, come in through here. That’s why you must size the vehicle correctly so you can take as much of that constellation and stack it up into space. The world has also diverged from singular, bespoke, really large school bus-sized satellites to smaller satellites which are closer to Earth, and now there are groupings of satellites. Depending on the constellation, they vary in terms of number of satellites. But to make and participate in the larger end of the market and market opportunity, which is all these constellation sets, you need a vehicle that’s large enough to take a meaningful amount of that constellation into space.
The closest light-lift example would be Rocket Lab Electron. It’s maybe like 10% of the commercial market, if that. And it just doesn’t justify the capital expense that you’d be putting into the vehicle because most constellation providers and a lot of what Canada has put up in the past require a much larger vehicle.
How does CRC plan to finance a $500 million rocket program?
“It’s a lot, but it’s also not a lot. 500 million dollars over a five- to 10-year time frame is not a ton of money in relation to a lot of other projects that get funded. We see a 50-50 split essentially: 50 percent government, 50 percent private investment. On the government side, we’re also looking for anchor contracts and modelling that approach after NASA’s COTS program because contracts provide financial visibility and help de-risk the riskiest part of the project: the first few launches, one or two of which are likely to fail. If those launches are funded and the development program has a backstop similar to what NASA provided through COTS, it helps de-risk that development phase. Other global launch programs have also had anchor contracts for their first few launches. That’s what we’re working with the government on. Then, ideally, we could fund this whole thing with Canadian capital, and if there’s ever an opportunity to do that, that’s right now.
But we are a bit of an odd duck in the venture world because we’re seven months old. You need $500 million, most of that upfront. We want to build a 500,000-square-foot facility and break ground in the next few months. That’s $100 million to $200 million right there. There is also a test site that we want to develop, and we have announcements coming in the next couple of weeks. There’s a significant investment on that front as well, and you need to do that now if you want to be able to have the launch vehicle in a plus or minus eight-year timeframe. This is unique because Canada does not have that infrastructure but is also committing to sovereign launch. Whereas you look at Europe and the U.S., they have that infrastructure that you can go out and lease; it’s ready to go.
But this is the fun part of starting any company: starting something from nothing. What I found is the more ambitious you are, the more people will match that ambition. The government has been fantastic and incredibly helpful. We would not be able to do any of what we’re doing without the support of the Department of National Defence and other areas of the government. And then, of course, on the private investment side, a year ago, people would have laughed if someone said, hey, someone’s going to raise $22.5 million in seven months, bringing 30 of the top rocket scientists and engineers to Toronto. Everyone would have thought you were nuts. We’re just going to 10x that ambition and keep going. Now’s the time to try it, and it gets easier as you get the snowball moving.”
Can Canada’s historic brain drain become a competitive advantage?
“We are definitely seeing that. There are a lot of Canadians across many of the top tech and engineering companies. We’ve brought nine folks and their families home, and if it’s not them, their partner is Canadian, and we brought them home that way. We’re very excited to be part of the brain gain now. I think the biggest thing is they’re attracted to the ambition, and they’re attracted to the mission. They understand that it’s important for the country. Everyone eventually wants to put their roots back in Canada. But they have not ever really had the opportunity, whether it’s pay, opportunity, or the mission, that you’re actually working on. Ambition attracts ambition. If you want to attract the top Canadian engineers who have been away from the country for 10-plus years, you’re not going to bring them back if you’re building just another AI company or just another defence company. It’s got to be incredibly ambitious, where they’re like, wow, I want to move my family. There is a lot of friction in uprooting everything and coming to Canada for a seven-month-old company pursuing this ambitious goal of building launch capability for Canada.
It also attracts international talent. Most of our team is from Europe, Australia or the US. They also see it as an opportunity to do something for the first time in a country that’s never done it before. There’s an element of making history and helping another country or an ally build the capabilities that they need. It’s been equally exciting to see the excitement of folks who want to come to Canada and do something like this.
We’re directly contributing to Canada’s sovereignty. We’re directly contributing to our ability to be a great trading partner with Europe, Asia, and our allies. And at the same time, we’re building this launch vehicle in a country that’s never done it before. You can attract some very special people. That creates the foundation of bringing in more folks and more experience, and it just becomes this flywheel. Then all of a sudden Canada’s got one of the preeminent aerospace clusters of talent, and it all stems from one crazy and ambitious goal, backed by execution and financials.”
What do the next 12 months look like? What do you want CRC and Canada to look like in 20 years?
“In the next 12 months, we’ll have an engine component hot fire. We’ll be close, but not quite there, to having an integrated engine without the turbopump. We’ll have broken ground for our 500,000-square-foot facility to bring that online. We’ll hopefully have completed phase one and maybe phase two of our engine test site, which we’ll announce the location of and details in a couple of weeks here.
A year from now, we’ll probably be 60 to 70 people. Over the next eight years, the goal is to get this vehicle to orbit, prove the capability, build relationships with our trading partners and commercial companies, and become the service provider for middle powers.
In 20 years, I would love to see a Canadian launch vehicle take a Canadian lander that goes to the Moon and helps build out lunar permanence. Seeing that level of ambition matched at the space agency and really participating in those mission sets, that would be fantastic. Then, obviously, once past the Moon, Mars, etc., building that muscle and ecosystem in Canada would be amazing. The midterm goal is not just to advance science and exploration, but to build a world-renowned talent base and a globally recognized company. You see people wearing NASA t-shirts all around the world. We can have people wearing Canada Rocket Company because they see the level of ambition we’ve been able to accomplish and to inspire the next generation of engineers, technicians, and mechanics. It’s important to think beyond just borders, but using and leveraging Canada as a base and exporting not just products, but hopes and dreams.”
What is one other Canadian national-interest startup that you think is worth watching?
“Dominion Dynamics. Obviously, what Eliot and the team are doing is fantastic. North Vector, too. I know you said one, but then Kepler, not just because Mina’s on our advisory board, but because what they’re building, the Internet of space, is super ambitious.”
If you’re building something in Canada, I want to hear about it. contact@ethanmarcoux.com
