Space Investments Surge at 2021 Midpoint

There seems to be a lot of appetite for space investments entering the second half of 2021. According to the 2021 Q2 Space Investment Quarterly, published by Space Capital … a New York seed stage venture capital firm investing in the space economy … the second quarter of the year was the fourth-largest on record for total investment in the space economy.

The data, gathered from a broad range of databases and confirmed by multiple sources, indicates that $14.9 billion has been invested in space companies year-to-date, with a trend towards larger, late-stage deals.

SPACs are popular with investors, and while only two SPACs closed in the second quarter of 2021, 14 have been announced this year with three successfully merged and two announced in the first week of the third quarter. The majority of the SPACs have focused on companies providing infrastructure with a focus on small launch, satellite hardware and in-space manufacturing. The 11 pending SPACs are projected to add more than $8.3 billion to the balance sheets of the target companies.

Space Investment Quarterly cautions that most of the companies are highly speculative and many are pre-revenue, but some have strong fundamentals that support their multi-billion dollar valuations.

In the infrastructure sector, mega-rounds by OneWeb, Blue Origin and Relativity Space have the category on track to outpace the record set in 2020. In that category, 464 companies have raised $37.7 billion over the past 10 years, leading to significant increases in access to orbit and distributed networks of small satellites. US companies have raised the most, making up 64 percent of the total capital raised since 2012. While early-stage rounds have traditionally lagged behind late-stage rounds since 2012, they also are a large majority of the total rounds at around 75 percent. Analysts are now seeing a shift in the early-stage pipeline from small launch to Earth observation and communications satellites.

Space investments are gravitating to the Position, Navigation and Timing and communications sectors, which account for 90 percent of all investment rounds in Distribution over the past 10 years. Earth observation accounts for seven percent of the rounds but only two percent of the capital investment, but it is an emerging sector getting more traction in early stage rounds.

The bottom line is that there has been $9.9 billion in space investments going to 138 companies during the second quarter of 2021, and a total of $199.8 billion invested in 1,553 companies since 2012. SPACs continue to be very popular with investors, with PIPEs (Private Investment in Public Equity) accounting for $5.9 billion of the $8.3 billion that is projected to flow into the targeted companies through SPACs in the second half of this year.

The full report is available from Space Capital.

(Source: Space Capital)