SpaceTech Is Going Global

European funding opportunities for space startups

Space startups are a big thing now. Reusable rockets, satellites, observing the Earth in real-time and asteroid mining technologies — it’s very easy to get fascinated with space.

And many of top-tier VC funds, including Sequoia, GV and Bessemer Venture Partners have already done so by writing multi-million checks to several SpaceTech companies. Generally, the amount of funding to space-related startups reached astonishing $2,3 bn. in 2015, according to CB Insights and recently announced OneWeb’s $1,2 bn. financing is supporting this thesis: SpaceTech is a really hot topic right now.

Jumping in to the topic of the article, I’ve decided to dive deeper, where the money to SpaceTech startups flow from, as I see a lot of anecdotal interest to this sector.

According to CB Insights’ Frontier Tech report, US-based funds are key investors in this area. To identify European SpaceTech funding opportunities, I’ve analyzed all space-related deals in which VC/PE funds and strategic investors have participated in since 2012 till now.

Clarifying the methodology, I’ve attributed following startups as SpaceTech ones:

• Space-related hardware manufacturers (rockets, satellites, subsystems, etc.)
• Companies, providing value-added services on top of the data from space (e.g. ag-related services on top of the satellite imagery)
• Companies, using data from space in any extent (e.g. mapping ones)

And here are the results: majority of SpaceTech deals have been made by US funds, then comes European ones, followed by Russian ones. Also, there is mounting activity in Japan, China and India. This seems rather reasonable, as historically there have been strong space industries in these countries.

As I primarily focus on Europe-based startups, I’d like to highlight European funding opportunities for space-related startups and outline:

• who are these investors,
• why there are much less funding opportunities in Europe, compared to US,
• try to figure out how this ecosystem would evolve in the future;

Thus, there are 35 European-based VC/PE funds, accelerators/incubators and strategic investors that funded space-related startups till now. I’d like to mention the most notable ones among them, arranging them by country.

UK has the largest presence in European SpaceTech investors landscape with 11 VC/PE funds + 1 strategic investor, funded space-related startups and even has £50M space-dedicated fund called Seraphim Space Fund, launched in 2016. Russia has 8 VC funds, invested in SpaceTech companies, including some of the most notable ones at the moment, such as Spire (Grishin Robotics) and Planetary Resources (I2BF Global Ventures, Grishin Robotics). 6 funds are located in Spain and one of the largest SpaceTech investors in Europe, Caixa Capital, that funded 3 space-related startups is located nearby, in Portugal. France is presented by 2 aerospace-dedicated accelerators: Starburst Accelerator (recently raised $200M venture fund) and Airbus BizLab. Among other notable investors, there are Metatron Global, Czech-based fund invested in 2 space-related startups and Capricorn Venture Partners, Belgium-based fund, that funded SpaceX.

In addition to private investors, there is another significant source of funding for SpaceTech startups in Europe — government. European Union’s Horizons 2020 program, providing nearly €80 billions of funding available over 7 years (2014 to 2020), is a good example of that. Leaf Space, Italian-based startup, developing a network of ground stations, collecting data from satellites, has already used this opportunity. Also, European Space Agency, has established 16 Business Incubation Centers, inspiring entrepreneurs to turn space-connected business ideas into commercial companies, and provide technical expertise and business-development support.

Thus, to recap — market map of European SpaceTech investor is presented above — feel free to use it and please hit me at @GalyaDegtyareva on Twitter if I’m missing something!

Speaking of why there are much less funding opportunities in Europe, compared to US, I guess the best way is to listen to the founders. Citing Peter Platzer, CEO at Spire, one of the most promising SpaceTech startups:

“Risk appetite in Europe is just lower. I am not saying this is good — I am saying it is a difference. You don’t have investors in Europe comfortable in taking risks”

This thesis is supported by Raul Torres, CEO at PLD Space, startup, developing first European reusable rocket:

“We see that [fundraising] as a very difficult topic today because of the [European] investor’s mindset”

Concluding this write-up and making a prediction on how European SpaceTech ecosystem would evolve I see following trends.

(i) More early-stage space-related startups would emerge in Europe
European ecosystem of space-related accelerators and incubators is already rather nascent and even more developed than US one, in my opinion. Also, some of the most well-known and established accelerators and incubators are located in Europe, thus there is a favorable environment for early-stage companies, which is also fueled by significant government efforts to foster space-related entrepreneurial activity.

(ii) More European funds would become involved in SpaceTech
Space is definitely going into mainstream, both in terms of media coverage and investors interest. For instance, there were quite a few panel discussions dedicated to space and a keynote speech from Steve Jurvetson, partner at DFJ, one of the most notable SpaceTech investors, at Slush this year.

From the other side, establishment of space-dedicated European-based VC funds, such as Seraphim and Starburst, are signaling that LPs are ready to commit capital to space ventures. Combined with increased space-related deal activity, these prerequisites can definitely be identified as positive background for European SpaceTech ecosystem.

Notably, US investors, who are driving SpaceTech startups funding at the moment, are also bullish on European space-related ecosystem. Chad Anderson, CEO at Space Angels Network, virtual angel network focused on investing in space startups, told me: “As we see it, there are three elements necessary to create a thriving entrepreneurial space sector: (i) technical heritage and expertise; (ii) a mature early-stage startup ecosystem; and (iii) government willingness to adapt and reform. And these three elements are prevalent in Europe, which bodes well for the future of the entrepreneurial space sector in region”. In addition to that, he outlined partnerships with European space hubs and large pipeline from Europe: “We have reviewed hundreds of business plans from European space startups and we are partnered with a number of ESA business incubation centers across the continent and in the UK”.

Summing up this write-up, I’d like to encourage both Europe-based investors and startups to get more involved in SpaceTech, as European space ecosystem is all set to jumpstart and a lot of opportunities are down the way.