Latest trends in Spacetech and their fundraising
Focus on the evolution of space industry and their VC investments
Hello everyone !
To continue this series on the trendiest sectors of startups, we’ll analyse SpaceTech today ! 🚀
Definition and scope 🔎
With Thomas Pesquet, the space flights promised by Jeff Bezos and the conquest of Mars with Space X, we might as well say that interest in space is seriously present !
It’s nice, because many problems are still to be solved and the optimization of existing materials is almost endless. As there is a solution to every problem, more and more startups have started to emerge to bring a value proposition superior to the pre-existing one on a large number of subjects :
- New imaging and manufacturing hardware solutions (robotics, 3D printing, nanolancers)
- Mission support and space mining
- Management of space waste and satellites in Earth orbit
- Real-time space data exploitation via AI
As complex as it is exciting, this sector is also part of a market that may soon reach solar wave temperature.🔥
The Market 📊
We can see that growth is very high : the global space economy was valued at $380 billion in 2020 and is expected to reach $10 trillion by 2030. Huge CAGR of space. 🤑
There are several reasons for this growth. First, from a geopolitical point of view, since the Cold War, most states link a military power that impresses with the ability to repeat expeditions in space. This is certainly a question of ego, but it mechanically leads to a race for funding, innovation and therefore growth of the space market.
Then, from a structural point of view, in terms of supply and demand. On the demand side, the main customers are not only private companies, but also the States themselves. As you have understood, the demand is huge, so is the market.
Finally, the space is without border in the sense of the Law. This implies that space belongs as much to France as to the USA, to China, to Russia…etc. As the discussions will inevitably arrive one day on the table to legislate on the question, it will most certainly be the State the most present in the solar system which will lead the discussions, a bit in Winner takes all mode. And as other states than those previously mentioned are starting to develop their space agencies to take a piece of the cake (such as Qatar), the market size increases once again accordingly !
However, it is not only States that participate in space innovation. Indeed, the number of startups that are starting to use VC funding rounds is growing steadily. Easier to obtain than public funding on the one hand, space knowledge openness on the other hand, our entrepreneur and investor friends are having a field day ! ⬇️
VC’s interest 🕵️
With a total of $28 billion invested in 3.086 companies, the U.S. is the undisputed leader in terms of investment in SpaceTechs (not to change). That’s about 6 times the amount invested in SpaceTechs companies in China → the second largest country in terms of investments ($4.786 billion invested in 122 companies). China is closely followed by the UK, where funds come mainly from public resources and IPOs, not from private funding (Venture Capital and Private Equity).
In terms of private financing on the VC and Growth side, the number of deals in this sector has increased overall over the last decade, even if the total value has seen a decline in 2019. In fact, the stars are aligned well, as funding follows similar curves in both Seed, Early stage and Late Stage. 💫
Some VC funds have already verticalized their investment thesis in the space field, which shows the great potential perceived by LPs on the subject. Among the most active investors on the Worldwide level in the space field, we find Space Angels, Hemisphere Ventures, Founders Fund or Khosla Ventures with for some more than twenty investments to their credit.
Blast, the beautiful French initiative 🇫🇷
In France, 35 SpaceTechs have raised a total of 260 million euros since 2018 according to CNES estimates. To build on this momentum, several French innovation players from the public and private sectors came together at the end of 2020 to create Blast, an acceleration program for aerospace and defense startups. This program is designed to become the gateway for researchers and entrepreneurs wishing to enter French and European aerospace and defense programs to pursue a commercial activity.
With a maximum of €9.6 million, funding is dedicated to start-ups in this sector in the Series A phase. The gas pedal also relies on public support, via Bpifrance, which will provide subsidies of up to 50% of project costs for the first two years.
The goal is to support at least 20 research projects and deep-tech start-ups in the pre-seed phase each year. The launch pad is ready.
So let’s get down to the business of discovering the hottest SpaceTechs of the moment !
3,2,1…Ready for take-off 🚀
1) Space Building
Space Building is the most important vertical within SpaceTechs, representing about 34% of startups :
- 21% in Science & Engineering ;
- 14% in Hardware ;
- 11% in Software.
This is understandable, since, just like airplanes, R&D is permanent in companies positioned in the space sector, particularly with regard to improving the materials used in spacecraft or communication systems. The problem is that, as is often the case, the inertia of large groups sometimes slows down innovation because of their complex and time-consuming validation processes at each stage of development.
This is why big space institutes have had a renewed interest in SpaceTechs. Indeed, it allows them to externalize the risk until the startups they are interested in have finished proving by A+B that their new products work perfectly. Smart.
From thrusters to nanosatellites to 3D printing, let’s take a closer look at all the Space Building innovations together :
Accion Systems (Boston) : Founded in 2014, SpaceTech develops technologies that aim to improve propulsion capability in space. That’s really useful, because propulsion is what allows a small satellite to move while keeping it in orbit, change its position to another orbit, or regulate its inclination to be more efficient and accurate. Its flagship product,TILE, uses proprietary ‘’electrospray’’ thrusters which integrate with all sizes of satellites. 🛰️
➡️ Accion Systems completed $11 million in 2020 funding with Space Angels, Shasta Ventures and Boeing Ventures.
Relativity Space (Los Angeles) : Founded in 2015, Relativity Space is a startup that automates aerospace engineering processes with robotics, software and proprietary metal 3D printing technology. It transforms the entire value chain to build and fly satellites and even rockets. Thanks to this process, building rockets becomes 100x faster than before (where it usually took years). Relativity Space’s vision is to eventually 3D print the first rocket directly on Mars and then develop and support an interplanetary civilization. That’s a great ambition 🤜
➡️ The startup has gone from a $10 million Series A in 2016 to a $650 million Series E in 2021 with Tiger Global and BlackRock among others participating in the round. Scaling in its purest form.
Alen Space (Spain) : Born in 2019, the startup invented nanosatellites ready to be launched directly into space. Traditionally, satellites are massive objects and usually require a lot of money and time to put into orbit. Thanks to advances in the space technology industry over the years, startups are rapidly developing small satellites at much lower costs. Some satellites weigh as little as 1 to 10 kg : these are the famous nanosatellites. Moreover, Alen Space develops communication hardware, embedded software and turnkey applications for data transmission from the nanosatellite. There are different applications such as aircraft monitoring, IOT or signal intelligence. 📡
➡️ The startup raised €1 million in 2019 with funding from BeAble Capital.
CesiumAstro (Texas) : Since 2017, the startup has been developing communication systems for satellites, drones, launch vehicles, and other space or airborne platforms. Each of their products includes carefully selected materials to bring high reliability to aerospace systems. Their team consists of engineers and scientists trained in the design, development and qualification of what they call ‘’multifaceted communication systems’’. 📞
➡️ CesiumAstro has completed a $12.4 million Series A funding round in 2019 with Airbus Ventures.
Silina (Paris) : Silina proposes to bend the image sensors produced by traditional manufacturers in order to bring significant improvements to existing cameras. These improvements include image quality, light transmission, and the cost and size of the optical device. This is done reliably and on an industrial scale. B2B solutions are developed for different types of sensors (from UV to infrared, CMOS and CCD), at different scales (single chip, multi-chip, wafer) and for different shapes (spherical, aspherical, freeform, custom shapes on request). Their technology is applicable to multiple industries including aerospace, defense, industrial imaging, smartphone cameras, and autonomous vehicles. 🎥
➡️ The startup joined the Agoranov incubator in 2021 after completing the Entrepreneur First program, a matter to follow for a future fundraising !
2) Exploration & Cleaning Space
To talk numbers, there are about 8.000 tons in space. And among these 8.000 tons, we consider that there are about 34.000 objects of the size of 10 cm or more. Among these 34.000 objects, there are 2.500 active satellites, the rest being space debris. The bad news is that this debris is bound to return to Earth. But when they do, they pass through the atmosphere and undergo heavy braking and their temperature rises to a maximum. As a result, they melt. Well, not completely, because there are materials that resist, for example titanium or carbon.
It is estimated that about 10 to 20% of the mass of a satellite or upper stage (of a rocket) survives the re-entry (into the atmosphere) and impacts the surface of the globe. Fortunately, the surface of the globe is 71% ocean and seas, 10% deserts… so for the moment, we have been statistically lucky not to have had any victims. But well, you understood the problem, cleaning the space becomes a planetary stake.
It would be a good idea to clean up space in order to be able to send future missions to Mars, to the Moon or even shuttles for space tourism. Moreover, according to Elon Musk, Space X will be able to send a first manned mission to Mars by 2026, even if some people find it (clearly) optimistic.
Let’s analyze startups that have positioned themselves to facilitate the exploration and cleaning of space :
Moon Express (Florida) : Founded in 2010, the startup is developing a solution for commercial exploration and transportation from Earth to the Moon. Its goal is for humans to have recurring access to the Moon for scientific, research, mining, and other purposes. Its innovative and flexible spacecraft significantly reduce the cost of commercial space activities. In fact, NASA has signed a contract to obtain its products. 👨🚀
➡️ The startup raised $20 million (Series B) in 2017 with Founders Fund participation followed by a $12.5 million Venture round in 2018.
Xinétis (Nouvelle-Aquitaine) : Born in 2021, the startup’s long-term goal is to depollute space. This project consists of the development of several solutions that allow for quick, easy and low-cost deorbiting of space objects in low orbit. Initially, they intend to commercialize modules that can be fitted to future satellites, allowing them to considerably reduce their deorbiting time. They then wish to propose equivalent solutions to equip more massive objects such as launcher bodies. Finally, the ultimate goal would be to propose “space tugging” solutions, allowing to capture and deorbit objects that do not have the capabilities. 🏗️
➡️ The startup has been part of the Blast incubator since 2021, can’t wait to see what happens next !
Exotrail (Palaiseau) : Founded in 2015, this is a SpacTech that aims to enable small satellites to move properly in space in order to optimize their deployment, increase their performance and reduce space pollution. Their solutions range from high-thrust propulsion systems for small satellites (ExoMG™) to orbital transfer vehicles (SpaceVan™) to mission simulation software (ExoOPS™). 🌌
➡️ Exotrail completed a $13 million Series A in 2020 with BPI France, 360 Capital and Innovacom.
3) Data
Many players are starting to use space data captured by satellites, such as Earth observation, positioning or communication data. Moreover, these space datas interacts themselves with other types of data (demographic, sociological, geographic, etc.) to improve the value proposition of companies in their market.
More concretely, SpaceTechs are beginning to deliver a la carte services in a variety of areas :
- precision agriculture ;
- road or air traffic management ;
- optimization of weather forecasting ;
- or energy infrastructure monitoring.
What is interesting is that new uses are constantly being discovered for spatial data : improving crop yields, understanding the speed of deforestation or beach erosion, knowing the filling rate of parking lots, etc.
Let’s take a closer look at startups that have developed on this vertical :
Capella Space (San Francisco) : Founded in 2016, Capella Space is a data services company that provides information from space through a group of satellites specifically designed for observation. It provides very high resolution, lower than 50 centimeter images of the earth using radar. Capella assists many industries around the world and aims to make earth observation an essential means for commerce and environmental conservation. 🌍
➡️ The startup raised $29.4 million in 2019 with funding from DCVC and Alumni Ventures Group.
SpaceSense (Paris) : As of 2019, SpaceTech’s primary goal is to make satellite imagery accessible to small businesses in agriculture. By combining the power of satellite imagery and AI, their solutions can be quickly adapted to each local environment and are deployable via APIs globally. In fact, they monitor 4 million acres across 10 countries daily. To give a more comprehensive example, the team has created a model that allows Spanish irrigation specialist Plantae to determine soil moisture at 30 cm depth with 90% accuracy. This should reduce costs for farmers, lowering their bills for sensor purchases as well as water consumption. 💧
➡️ The startup raised $1.2 million (Seed) in 2020 with Space Ventures Investor participating in the round.
Descartes Underwriting (Puteaux) : Born in 2018, The startup leverages real-time spatial data to model the evolution of climate risk by region. In particular, this allows insurers to characterize the magnitude of the environmental phenomenon so they can adjust their insurance products more quickly. ⚡
➡️ Descartes Underwriting completed an $18.5 million Series A in 2020 with Serena, BlackFin Capital Partners and Cathay Innovation.
Focus on IPO 📈
AAC Clyde Space (Glasgow — IPO in 2019) : The company specializes in the provision of small spacecraft and space mission services, including the small satellite solutions and services market for government, commercial and educational organizations.
AAC Clyde Space is a Space-as-a-Service company, providing a complete, integrated end-to-end space mission service from satellite manufacturing to the transmission of collected space data. AAC Clyde Space is the trade name formed by ÅAC Microtec and its subsidiary Clyde Space. The company has a strong international presence with its main operations in Sweden, the UK and the US, with partner networks in Japan and South Korea. 🚀
➡️ Shares in the Swedish parent company of the ÅAC Microtec Group are traded on Nasdaq First North Stockholm.
Other SpaceTechs have recently completed their IPOs such as :
- Virgin Galactic (California — IPO in 2019), which is developing a new generation of space vehicles to make space accessible to all
- AmpliTech Inc (New York — IPO in 2021), a company that makes custom components and materials for space, defense and military markets
Useful Resources 🗒️
- 💡 The Spacetech Industry 2021 / Q2 — Landscape Overview market report by SpaceTech Analytics to learn all about the financial and geographical aspects
- 📚 The Biography of Elon Musk, soberly titled Elon Musk (by Ashlee Vance) and explaining the genesis of Space X. A must-read !
- 📰 Interesting article on Space X’s ambition to go to Mars
This article is finished ! Thank you for your reading, I hope you enjoyed it !
To continue the adventure, the next episode will focus on startups that develop the foundation of everything we know and use today : Cybertech ! 🤖
