Updated at 9:50 p.m. Eastern.

WASHINGTON — A green propulsion startup with more than $1 million in sales says it is gaining traction in the smallsat market while funding its own small launch vehicle.

Dawn Aerospace, based in New Zealand and the Netherlands, has its first propulsion system launching in March on a D-Orbit cubesat aboard a Vega rocket. A second is scheduled to launch on an Indian PSLV in the second quarter of 2020 on a cubesat for Hiber, a Dutch Internet of Things startup. Dawn Aerospace also has contracts from the New Zealand Space Agency and the U.S. Air Force, Dawn Aerospace CEO Jeroen Wink said in an interview.

Formed in late 2017, Dawn Aerospace has raised a little over $2 million. Tuhua Ventures, a firm that invests in New Zealand startups, led the company’s seed round in 2018.

“The idea is to be able to commercialize something very early, to help fund future launcher development,” said Joshua Rea, who does business development at Dawn Aerospace, said. “People we sell propulsion to will likely be customers for launch in the long term.”

Dawn Aerospace is commercializing thrusters that use nitrous oxide and propene instead of hydrazine. Its 5-pound-force thruster is produced without components restricted by U.S. International Traffic in Arms Regulations, according to the company.

Wink said Dawn Aerospace built three flight-ready propulsion systems for cubesats in 2019, and eight larger thrusters for microsatellites. This year the company aims to build 50 cubesat thrusters and 100 microsat thrusters, he said.

Dawn Aerospace is using revenues from those sales to develop a drone-launched rocket system. Rea said the uncrewed spaceplane would fly above 100 kilometers, reaching a speed of 4-kilometers per second. An expendable two-stage rocket would then vault “several hundred kilograms” into low Earth orbit, Wink said.

Dawn Aerospace hasn’t finalized how much mass its future launch system will be able to carry, Wink said. The company plans to conduct a suborbital flight this year, in hopes of maturing launcher technology and creating an additional revenue stream by carrying payloads to microgravity, he and Rea said.

The company’s orbital launch system is at least four years away from flying, Wink said.

“What we’re really after is applying the model of aviation to space transportation,” he said. “Part of that is not requiring a whole lot of ground infrastructure. We want to be as flexible as possible, taking off from any place in the world.”

Dawn Aerospace is not alone in planning an air-launched rocket system. Virgin Orbit says it will debut LauncherOne with its modified Boeing 747 carrier aircraft early this year, and Huntsville, Alabama, startup Aevum plans a first launch using a drone in 2021.

Wink said Dawn Aerospace’s founding team met during 2010 while working on suborbital rockets at the Delft University of Technology. That work gave them experience now leveraged on building a commercial launch system.

Dawn Aerospace’s New Zealand staff handle launcher airframe development, in-space propulsion assembly, verification and validation and most commercial activities, Wink said. Launcher propulsion and avionics are under development in New Zealand, where test flights are planned, he said.

Wink said Dawn Aerospace is working to close a $10 million Series A round in the second quarter of 2020. He said spaceport discussions are also underway with airports in New Zealand and Germany.

Rea said Dawn Aerospace plans to open an office in the U.S. and build up a sales team there. The company is comprised of 25 people today, Wink said.

For satellite propulsion, Dawn Aerospace is using a combination of commercial off the shelf technologies and customized 3D-printed parts, Wink said. He said Dawn Aerospace can provide propulsion systems for larger satellites by scaling the number of thrusters, but that that method loses efficiency as satellites grow into the multi-ton range.