Research: $8bn invested in space start-ups
September 29, 2023
By Chris Forrester
Analysts at research consultancy BryceTech say that investment in commercial space ventures attracted about $8 billion (€7.5bn) in 2022.
Bryce says that this investment was in the form of 154 deals, involving more than 400 investors, in 123 companies based in 20+ countries. For eight of these companies, 2022 saw their first publicly announced funding. The average deal size in 2022 was $53 million, and seven deals were over $100 million.
The biggest deals in 2022 were driven by SpaceX, accounting for $2.2 billion out of $8.2 billion. Later-stage start-ups received the largest investments in total magnitude, and series D rounds made up a more significant proportion of investment deals compared to 2021 levels. Space investment activity in 2022 occurred in the context of a global economic downturn which saw reduced venture funding across all industries.
However, public offerings declined both in number and value. In 2022, three space companies went public via special purpose acquisition company (SPAC), raising over $250 million (a decline of 94 per cent). In 2022, SPAC investment dropped across all industries, including start-up space. 2021 saw a peak in space SPACs; public offering investment rose 823 per cent in 2021 to account for 28 per cent of total start-up space investment. This was primarily enabled by using SPACs as an alternative to traditional IPOs, as 12 start-up space companies went public through SPACs in 2021 and only 2 companies went public via IPO. The decline in public offering revenue accounts for a large portion of the overall investment drop from 2021 to 2022; when public offerings are excluded, the decrease in start-up space investment is 29 per cent. The decline in SPAC activity was driven by the significant reduction in investor appetite for SPACs in all sectors, including space.
The research adds that the availability of investment capital, business case outcomes for large LEO constellations, and government support of commercial space activities, particularly in national security, will shape the start-up space ecosystem in the next few years.
In addition, consolidation is a growing trend; at the halfway mark, 2023 has seen important developments, such as potential M&A activity around ULA, the (now concluded) OneWeb/Eutelsat merger, Viasat’s acquisition of Inmarsat, the completion of L3Harris acquisition of Aerojet Rocketdyne, and BAE Systems’ acquisition of Ball Aerospace. As space industry specific factors can affect investment activities, broader factors such as global events and economic conditions may also shape the availability of investments as well.
In 2022, 51 per cent of angel investors were based in California, followed by 12 per cent in New York and 6 per cent in Washington. The remaining 31 per cent were from 23 other states. Outside of the US, 24 per cent of non-US-based angels are based in India, 14 per cent in Japan, and 14 per cent in the UK. The remaining non-US angels are from 21 other countries.