Space Capital launches Fund 3 to continue investing at the intersection of space and tech
Space Capital, a seed-stage venture capital firm investing in the Space Economy, is pleased to announce the launch of Space Capital III, a $65 million fund to continue investing at the intersection of space and tech.
Amid these challenging economic times, one thing remains certain — space-based technologies are playing an increasingly vital role in our economy, and will continue to transform the world’s largest industries for decades to come.
From the start of last year, the conflict in Ukraine has showcased the growing capabilities of commercial space companies. SpaceX’s Starlink enabled Ukrainians to stay connected and combat Russian misinformation, while Earth imaging companies have provided a foundation of truth for what’s happening on the ground. These space technologies are providing essential insights and information to enterprise and government customers who are willing to pay, despite market cycles. In fact, the National Reconnaissance Office announced a multi-billion satellite imagery purchase (its largest-ever) in Q2'22, during the steepest decline in the financial markets. As a result, record revenues for Earth Observation companies are demonstrating how some segments of the Space Economy are countercyclical and recession proof.
Likewise, this challenging market environment has been a showcase of Space Capital’s disciplined strategy. We did not invest at inflated valuations during the market mania over the past couple of years and, by providing essential insights and information to enterprise and government customers, our portfolio has proven highly resilient through this market downturn. As a result, several of our portfolio companies have raised subsequent follow-on rounds in the last 12 months and our overall fund performance is now top decile, benchmarked to the latest data from Cambridge Associates.
Our thesis recognizes that space-based technologies are the building blocks of innovation on Earth. GPS, Geospatial Intelligence (GEOINT), and Satellite Communications (SatCom) are already the invisible backbone that power the world’s largest industries. And demand for precise positioning, global intelligence, and ubiquitous connectivity are delivering “Wall Street’s next trillion dollar industry”.
In our seminal thesis paper, The GPS Playbook, we explore how a space-based technology generated trillions of dollars in economic value and some of the largest venture outcomes in history. We believe that the history of GPS provides a framework for understanding how space-based technology has become a platform for innovation on a global scale; specifically, the development of technology layers on top of space-based infrastructure and the distribution of data for mass adoption, which unlocks thousands of unique applications. We also believe that GPS provides a playbook for how space-based technologies will create new investment opportunities; GEOINT and SatCom have similar growth potential to GPS and we are investing to unlock that value.
Now, with Starship expected to come online this year, the Space Economy is entering a new phase of infrastructure development that will significantly impact the opportunity set. It will make existing infrastructure obsolete, accelerate growth in existing markets, and enable entirely new ones. This new infrastructure will enable new use cases and advances in terrestrial tech will continue to accelerate growth. For example, recent advancements in AI are enhancing the capabilities of companies within Distribution and Applications layers, particularly within the GEOINT sector. We are actively investing in founders who are leveraging space data and cutting-edge technologies to revolutionize global industries. If that sounds like you, connect with us at launch@spacecapital.com
We continue to believe that the reset in the venture capital market is healthy and that less frothy valuations, less competition, and more available talent will make the next two years a great time to start and invest in technology companies — particularly space tech companies that are providing essential data and insights to enterprises and governments. As the Space Economy matures, we’re tracking a 300% increase in alumni from companies like SpaceX, Planet Labs, and others, who are founding new companies. Despite the challenges caused by macro market headwinds, we’ve never been more bullish on space as an investment category.
The Space Capital team is composed of the world’s most experienced investors and operators in the category and, so, is uniquely qualified to run the strategy of today and tomorrow. Our partners have built rockets, satellites, and operating systems. We have founded companies with assets currently in orbit and have led multiple exits as operators. We have been pioneering investment in this category for over 10 years. And now, we have literally written the book on the subject with The Space Economy: Capitalize on the Greatest Business Opportunity of our Lifetime, published by Wiley.
