VLEO satellite investment to near $10bn by 2031, Juniper Research finds

Global investment in Very Low Earth Orbit (VLEO) satellites will reach close to $10 billion by 2031, up from $5.2 billion in 2026, according to a new market study by Juniper Research published on 28 July 2026. The near doubling of investment over five years reflects accelerating commercial interest in next-generation satellite constellations, growing demand for low-latency connectivity, and material improvements in propulsion and onboard computing that are making VLEO missions progressively more viable.

VLEO is broadly defined as orbital altitudes below 450 kilometres, which is meaningfully lower than conventional low Earth orbit (LEO) constellations such as SpaceX's Starlink or OneWeb, which operate at altitudes between roughly 550 km and 1,200 km. The closer proximity to Earth enables higher-resolution imaging with smaller, lighter payloads, and reduces signal round-trip latency, both of which have direct commercial value for Earth observation customers in sectors ranging from agriculture and insurance to defence and maritime logistics.

Earth observation as the primary growth driver

Juniper Research's analysis identifies Earth observation as the single largest driver of VLEO investment throughout the 2026-to-2031 forecast period. The physics are straightforward: at sub-450 km altitudes, optical and synthetic aperture radar payloads can achieve comparable imaging resolution to those flown on heavier, more expensive LEO satellites. That payload efficiency improves mission economics and opens commercial Earth observation to a wider range of operators, including smaller sovereign agencies and private-sector players that could not previously afford the infrastructure.

The central technical risk cited in the report is atmospheric drag. At lower altitudes, residual atmospheric density is higher, which applies a continuous braking force on satellites, shortening their operational lifespans unless countered by active propulsion. Vendors that can develop effective ion or chemical thruster systems, alongside lightweight drag-tolerant airframes and advanced materials, will have a meaningful competitive advantage. Juniper frames the current period as a strategic window: the vendors that solve the drag problem first will be best placed to capture the market as investment scales.

Market context and competitive landscape

The VLEO segment is still early-stage, with most commercial activity at the constellation design and demonstration phase. A number of well-funded startups, including Skimsat and Albedo in the US and Gravitics in Europe, are pursuing sub-300 km imaging missions, while established prime contractors and government space agencies are running parallel programmes. National security demand is a significant but often undisclosed component of early VLEO spending, particularly in the US, the EU and the UK, where defence and intelligence agencies have signalled strong interest in persistent, high-resolution overhead coverage.

The broader context is a continued structural reduction in launch costs, led by SpaceX's Falcon 9 and Falcon Heavy rideshare programmes, which have cut per-kilogram launch prices substantially over the past decade. This commoditisation of access to orbit is a key enabler for the VLEO economics Juniper describes: smaller, cheaper satellites become commercially rational only when launch costs are low enough to amortise the shorter lifespan imposed by drag.

Regulatory and standards read-across

Spectrum allocation and orbital debris mitigation are the two regulatory dimensions that will shape VLEO commercialisation. The International Telecommunication Union's spectrum coordination process applies to VLEO operators seeking to offer broadband or IoT connectivity, and timelines for securing filing rights can run to several years. On debris, the US Federal Communications Commission's revised five-year deorbit rule, adopted in 2022 and applying to new licence applications, is broadly compatible with VLEO lifespans given the rapid natural orbital decay at low altitudes. The UK's Space Industry Act and the European Union Agency for the Space Programme are both updating licensing frameworks to accommodate the specific characteristics of very low orbit operations.

Juniper's forecast covers more than 5,500 data points across 68 countries over six years. The underlying report includes a Future Leaders Index assessing competitive positioning across the vendor landscape.