Although Jeff Bezos‘ and Richard Branson‘s brief space jaunts have generated massive media interest in space travel for the last week, investors have been over the moon about space tech for at least two years now.
Venture funding in space travel, satellite communication and aerospace — which includes space-related technologies such as thrusters and propulsion systems — hit a new high last year, and that record is likely to be eclipsed this year.
According to Crunchbase data, nearly $5.2 billion in venture funding has gone into space tech funding already this year — including huge rounds such as SpaceX’s $850 million round and Long Beach, California-based Relatively Space‘s$650 million Series E.
Those figures put this year on pace to rocket past the nearly $6 billion invested in space tech last year. Deal flow also is on track to exceed last year’s with 136 funding rounds announced thus far this year compared to 238 in 2020.
“I think in the last 12 to 18 months … you are seeing investors open up to new types of space technologies,” CEO of El Segundo, California-based Phase Four, a developer of a thruster for satellite propulsion that closed a $26 million Series B last month, Beau Jarvis said.
“Investors are seeing the ecosystem as more complex than just rocket launching,” he said.
While companies like Elon Musk’s SpaceX, Bezos’ Blue Origin and Branson’s Virgin Galactic catch many of the headlines, those in the industry say the current escalation in funding is really due to satellite technologies and investors seeing the possibilities involved in building up the infrastructure of space for the betterment of business down below.
“This current interest really started about two years ago,” said Stewart Alsop, co-founder and partner at Alsop Louie Partners, an early-stage technology venture capital firm that has investments in Phase Four and Berthoud, Colorado-based propulsion technology company Ursa Major Technologies.
Steve Jurvetson, co-founder of Future Ventures, sits on the board of SpaceX and said that while space tourism “sets people dreaming again,” some of the biggest opportunities related to space tech are really related to communication, earth imaging and telecom.
He said those opportunities and others have definitely increased interest in the sector. By his count, in the last three years, more than 300 venture capital firms have made their first bets in space tech.
“We are creating a digital platform in the sky,” he added.
Just this month, Google-backed Planet Labs announced it will go public in a $2.8 billion SPAC deal. In April, Seraphim Capital-backed satellite-to-cell company AST & Science — now known as AST SpaceMobile — went public through a SPAC. Also in April, Canadian space operations and satellite company MDA had an initial public offering on the Toronto Stock Exchange.
In March, another Seraphim Capital-backed company — small satellite builder and data company Spire Global — announced a SPAC deal which will value it at $1.6 billion. That same month, Rocket Lab announced it would merge with a SPAC to go public later in the year in a deal that values the company at more than $4 billion.
Peter Kant, CEO of Boston-based propulsion developer Accion Systems, said the interest from SPACs in space technologies is very real. Accion just raised a $42 million Series C this week and Kant said the company was approached by SPACs while fundraising.
“It seems like raising $300 million is easier than raising $30 million because of the aggressiveness of the SPAC market,” he said with a laugh.
“There is just such a range of opportunities coming to the market for investors,” said Boggett referring to exit strategies now available to companies in the industry.
Space technologies are being defined by the industries of space travel, satellite communication and aerospace as according to Crunchbase data. Funding numbers include pre-seed, seed and all venture rounds.
