Space Investment Hits Record $3.5 Billion in Third Quarter: Report
Hardware-Focused Startups Drive Global Funding to Near All-Time High as Industry Rebounds from 2022 Pullback
Private investment in space technology companies reached a record $3.5 billion in the third quarter of 2025, marking a sustained rebound in an industry that has matured beyond a handful of mega-rounds to a broader base of hardware-focused scale-ups, according to a quarterly report by Generation Space, the U.S. division of Seraphim Space Group.
The third-quarter figure represents an increase from $3.1 billion in the second quarter, bringing trailing 12-month investment to $10.4 billion—just short of the all-time high of $10.9 billion set in the second quarter of 2021. The recovery reflects growing investor confidence across the space technology sector after a pullback through 2022.
According to the report, the growth represents a robust rebound from the 2022 pullback and, importantly, appears to be underpinned by a broader and more resilient base of activity, rather than a few outsized mega-rounds. The current investment cycle has been driven by a diverse group of hardware-focused companies, signaling renewed investor confidence across the sector.
The United States continues to dominate global investment volumes, accounting for 55% of total investment in the 12 months ending in the third quarter, while China accounted for 16%. Investment activity in the third quarter remained concentrated in businesses with significant hardware components. China accounted for the two largest deals of the quarter—Galactic Energy Aerospace Technology raised $336 million and Geespace secured $281 million. Notable U.S. deals included Hadrian with $260 million, Apex at $200 million and Hermeus with $160 million.
In public markets, Planet Labs led with 113% growth in the third quarter, driven by record revenue, adjusted EBITDA break-even and major contract wins. Rocket Lab gained 63% following increased launch frequency and progress on its heavy-lift vehicle.
Firefly Aerospace debuted on public markets with a valuation of approximately $6.3 billion, gaining more than 50% in early trading. However, the company closed the third quarter down 35% from its IPO listing price after the first stage of its Alpha Flight 7 rocket exploded during ground testing ahead of its scheduled fourth-quarter launch.
The report notes that SpaceX is reportedly considering an equity raise at a $400 billion valuation. Combined with defense modernization initiatives including the U.S. Golden Dome program, Generation Space anticipates the fourth quarter of 2025 will close out a record year in space technology investment.
The third quarter saw 160 deals compared to 171 in the second quarter. The median deal size was $5.8 million, down from $9.8 million in the previous quarter, while the average deal size rose to $30 million from $25.5 million.
In Europe, defense and space funding commitments are ramping up. The European Commission has proposed 131 billion euros for defense and space spending, representing a fivefold increase compared to the previous budget cycle. Germany announced it will invest 35 billion euros into space-related defense projects by 2030.
Unlike the 2020-21 cycle driven by a few deals exceeding $1 billion, the third quarter of 2025 was defined by a broader set of raises between $100 million and $300 million across multiple businesses, marking what the report characterizes as a more balanced and mature phase for the sector.