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Report: UK leads Europe in space investment race

May 16, 2023

New analysis from investment experts offers insight on the wealth of opportunities found within the UK’s £17.5 billion (€20.1bn) space sector.

The report, Expanding frontiers – The down to earth guide to investing in space, produced by PwC in association with the UK Space Agency, highlights expected global space sector growth of up to 11 per cent per year over the next decade and a near doubling of venture capital investments in revenue-generating space companies in the UK between 2015 and 2022, with 63 per cent of investors new to the sector in 2021.

The report details trends for new and established investors who are interested in growing their space portfolio, including opportunities with companies seeking to improve access to healthcare and tackle global climate change challenges, from decarbonising economies to increasing food security.

“This report shines a light on the breadth and depth of space investment opportunities,” says Craig Brown, Director of Investment at the UK Space Agency. “From today’s satellite communications to the future of orbital assembly, space has taken on an increased significance as a deeply embedded part of the global economy that is poised to grow at up to 11 per cent per annum to 2030.

“As the number of satellites above us increases dramatically, there are even greater opportunities to capitalise on the wealth of data they collect and on the international efforts spearheaded by the UK to keep the space environment safe and sustainable for generations to come.”

According to the report, the UK has been the leading destination for space investment in Europe – and second internationally behind the US – since 2015, receiving 17 per cent of global investment.

“This report shines a light on the substantial contribution that the space industry can make to solving some of our biggest global challenges, from decarbonising our economies to increasing food security and improving access to healthcare,” commented Matt Alabaster, Partner at PwC Strategy&.

“Our analysis shows that there are opportunities for investors of all stripes; the industry contains asset-light and technology-driven businesses, as well as infrastructure assets and supporting services businesses, all of which stand to benefit from the significant growth of the global space industry.”

The Expanding frontiers report calculates a median 400 per cent increase in deal size for early-stage investments and highlights a number of fast-growing UK space organisations, from satellite communications firm, OneWeb, to Wales-based aerospace manufacturer, Space Forge, which raised Europe’s largest ever seed round for a space tech company in December 2021.

“We’ve spear-headed new investment into the UK space sector from homegrown and valued international partners,” said Joshua Western, CEO and Co-founder of Space Forge. “The growth in our company and this sector is testament to the untapped potential of the UK space ecosystem. We are excited to be part of a dynamic and rapidly expanding industry that makes a significant contribution to the UK economy.”

Research shows that the UK has become a particularly attractive market for venture capital firms, being home to the HQ of leading space fund Seraphim Capital – which was the top investor in UK space organisations in 2022 – and offices of US space and deep tech fund, TypeOne VC.

UK space organisations have received investments from at least seven of the most active global investors, and nine of the largest UK-based venture capital firms, including University of Cambridge Enterprise, Octopus Ventures and Molten.

Taking into account government, non-commercial (universities and research institutes) and commercial organisations, it describes the UK space sector as a “hidden utility” that underpins our daily lives and supports an estimated £370 billion of the country’s economy, mostly through satellite-based services.

The data follows figures in the recent Size and Health of the UK Space Sector Report showing that £635 million was invested in UK-headquartered space companies through 34 identified deals in 2022, with acquisitions accounting for three quarters of the total investment value.

Space sector income increased by more than 5 per cent into 2021, outpacing both the growth of the global space industry in the same period (1.6 per cent) and the general UK economy, which contracted by 7.6 per cent.

“The report highlights how space is already the hidden linchpin behind our everyday lives – with nearly one-fifth of the UK GDP underpinned by space-derived data, applications and services,” commented Mark Boggett, CEO of Seraphim Space. “Furthermore, the UK plays an important role globally, positioned second only to the US in terms of private investment in space with a 17 per cent market share that will continue to grow as the number of UK and European space start-ups swelled by 50 per cent last year.”

“Seraphim is at the forefront of this exciting industry, generating attractive returns by investing in SpaceTech companies that benefit society. As UK space tech ascends, we stand ready to contribute significantly to this exciting landscape: investing in future UK space companies that are set to become global leaders. This is merely the dawn of space tech, and we are thrilled to be part of this exhilarating journey.”



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