Report: 2021 a record year for space start-ups
April 14, 2022
By Chris Forrester
Bryce Tech, in its annual review of investment in commercial space ventures, says that last year was a record in terms of investment in space start-ups.
Start-up space companies attracted more than $15 billion in total financing during 2021, shattering the $7.7 billion record set in 2020. The number of recipients and deals both increased nearly 50 per cent, while the average deal size grew 35 per cent.
Bryce says the significant increase in investment was driven by several trends including:
• The continuation of large amounts of private capital into start-up space ventures (especially from larger and more frequent late-stage investments). Venture capital investment grew 82 percent. The total number of VC deals grew 54 percent. Since 2016, the average VC deal size in space has steadily increased to $75 million.
• The emergence of public markets as a significant source of funding (10 space start-ups went public via special purpose acquisition companies in 2021, raising nearly $4 billion).
• A record number of mergers and acquisitions (13 in 2021) were driven by space-focused holding companies, recently public space companies, and legacy space incumbents.
The report illustrates a record-setting year for start-up space funding and discusses how future performance risks remain for some space ventures, due to unproven business models, uncertain customer bases, and typically lengthy time horizons for space businesses to mature.
Bryce gives some key examples, including SpaceX which received an estimated $1.8 billion in VC investment in 2021, the most by any single company. Reports from SpaceX’s most recent funding round estimate the company’s valuation exceeded $100 billion. OneWeb received $1.5 billion in VC funding in 2021, largely supported by corporate venture activity from Bharti Enterprises and Eutelsat.
Sierra Space, the space-focused spin-off of Sierra Nevada Corporation, raised $1.4 billion in a venture round for the continued development of its reusable spaceplane, DreamChaser, as well as its large integrated flexible environment (LIFE) module, an inflatable habitat designed to support crewed on-orbit activities. Other companies attracting large infusions of venture capital during 2021 included small launch providers Relativity Space, raising $650 million, and ABL Space Systems, raising $370 million, respectively.