NewSpace flies to higher levels
And hopefully brings investors optimism as high!
Today Starship is flying to new heights! 🚀
Congrats to all the engineers, space scientists, and teams behind this incredible journey. We know the sleepless nights, rollercoasters between victories and setbacks, incredible team collaboration, and absolute dedication to excellence that have led to this moment.
We know, cause believe it or not, we have these in Europe too.
How do I know? Cause while many have been preparing for take off, I have been deep diving. Diving into SpaceTech.
And even at a time when European tech bashing is popular, I am still simply impressed by the dedication, ambition level and intelligence I saw.
Overcoming Europe Skepticism: Supporting our Talents
In an era of Europe skepticism, we tend to forget about the greatness we have in-house. And we forget to support our talents, talk about them, and contribute to an overall more optimist, boldest environment, that is needed for innovation.
I am of course talking about people behind well know ventures (👏 AAC Clyde Space, GOMspace, NanoAvionics, D-Orbit, ICEYE, SpaceForge, Isar Aerospace, The Exploration Company, etc etc) but also about all the lesser known ones, or even failed ones, that attempted. As we know, building a SpaceTech company is already incredibly challenging, and yes, doing so in Europe comes with its own unique set of hurdles - critical lack of capital, industry fragmentation, expensive workforce, etc. So it truly takes heroism or madness to embark on this journey, and we should celebrate those who do! Cause timing might be now for them to shine!
So today I am adding a drop of excitement in the ocean of NewSpace and why I think it is time investors like me do the hard work of digging!
NewSpace: The Commercial Space Revolution
Space used to be the exclusive domain of government agencies like NASA and ESA in the West, or ISRO, CNSA, and Roscosmos in the East. Now, it is a dynamic industry fuelled by private enterprises and innovative startups. We often hear about SpaceX, BlueOrigin, RocketLab, etc (and in Europe, maybe Gomspace? Isar Aerospace? ICEYE? D-Orbit?) but there is a universe of ventures beyond these industry giants. According to a recent World Economic Forum (WEF) and McKinsey report, the global space economy is projected to grow from $630 billion in 2023 to $1.8 trillion by 2035. This is the NewSpace era.
Also known as commercial space, Newspace refers to the burgeoning private spaceflight industry that aims to make space more accessible and economically viable through cutting-edge technologies and business models. This sector's growth is fuelled by a combination of technological advancements, increased accessibility, political stakes, and the broadening applications of space technologies across various industries. Industries like logistics, food, defence, retail, and digital communication are set to comprise 60% of this $1.8 trillion market by 2035.
Let’s picture it: the future is where space becomes a hub for worldwide connection, innovation and value creation, business growth and collaboration. So if you were not convinced by past stories that have shown how investors can reach significant economic returns while addressing some of the world's most pressing challenges, from climate change to global connectivity, at least these numbers should be encouraging.
Now, what is to see beyond numbers? Let’s look into underlying trends to better understand the shift. Hopefully that will help give more context and depth to the spacetech shift and Newspace momentum. To illustrate my point that timing is now for European Newspace, I will give three kinds of examples.
First, commercial successes in the US, to illustrate that Newspace is possible: tech is ready, and commercial viability is proven.
Second, European governmental successes: Europe has talents, and a solid industrial tissue.
Third, commercial debuts in Europe: Europe is still in its very early days for commercial spacetech ventures to emerge, illustrating the need for more capital to flow towards NewSpace instead of keeping being concentrated in governmental initiatives.
The Driving Forces Behind NewSpace
Push Factors: Urgent Need for New Solutions
A. National Security and Surveillance at stake
Space has very intricately been linked to defence and warfare, serving as a crucial domain for national security from the Cold War to these days. Today, with the growing complexities in global security dynamics, and more capable actors with rival ambitions, the strategic importance of space technology in national security is more significant than ever. Countries around the globe leverage satellites for various defence-related applications:
Surveillance and Reconnaissance: Satellites provide high-resolution imagery and real-time data, enabling countries to monitor potential threats and track movements across vast areas.
US Commercial Success: HawkEye 360 raised over $400 million to operate a constellation of small satellites to track and analyze radio frequency (RF) signals, which can be crucial for identifying illegal activities such as poaching, illegal fishing, and detecting emergency beacons during crises. Capella Space, funded with over 200m, is also known for its on-demand, 24/7 synthetic aperture radar (SAR) data
EU Governmental Initiatives: The European Union's Copernicus Sentinel-6 satellite has enhanced Europe's capability to monitor environmental and security threats from space, showcasing Europe's talent and solid industrial base.
EU Commercial Debut: ICEYE, a Finnish startup created in 2014 funded with $304 million, is one of the only success in Europe, gaining traction with its SAR satellites providing high-resolution imagery for surveillance and reconnaissance, illustrating the early days of European commercial spacetech ventures. LiveEO, a German startup leveraging data from more than 900 satellites that monitor and help predict the condition of critical infrastructure assets on Earth, could also provide such capabilities.
Missile Tracking: Advanced satellites can detect and track missile launches, providing critical early warning systems that are essential for national defence strategies.
US Commercial Success: Rocket Lab, founded in 2006, has advanced missile tracking capabilities with its innovative satellite technology.
EU Governmental Initiatives: The UK’s development of the Skynet 6A satellite highlights the significant achievements of EU governmental efforts.
EU Commercial Debut: N/A. We need more.
Communication: Secure satellite communications are vital for military operations, ensuring reliable and encrypted communication channels even in remote or hostile environments.
US Commercial Success: SpaceX's Starlink has revolutionized secure communication for US military operations, setting a commercial success standard.
EU Governmental Initiatives: The European Data Relay System (EDRS) by ESA enhances secure communication for European military and security services, showing Europe’s industrial strength.
EU Commercial Debut: OneWeb, with its network of 634 satellites, focuses on providing high-speed internet connectivity, particularly for businesses. All.Space previously Isotropic, founded in 2013 in the UK, is advancing secure satellite communications with its innovative antenna technologies.
B. Environmental Monitoring Urgency
Environmental challenges are escalating, making it crucial to monitor and respond effectively to changes. Global warming, natural catastrophes, industrial risks, biodiversity. Monitoring and anticipating our planet’s biggest risks is our priority. Satellites offer unique capabilities for monitoring the Earth's environment, surpassing the reach and scope of ground-based technologies:
Climate Change Tracking: Satellites monitor atmospheric gases, deforestation rates, and polar ice melt, providing essential data for understanding and addressing climate change.
US Commercial Success: Planet Labs, founded in 2010, has raised over $183 million and has successfully deployed a fleet of small satellites for environmental monitoring, proving the effectiveness and commercial potential of such initiatives.
EU Governmental Initiatives: The ESA's Copernicus Sentinel-5P satellite monitors air pollution and tracks greenhouse gases, providing essential data for climate change mitigation efforts and highlighting European talent.
EU Commercial Debut: PlanetWatchers, a UK-based startup, specializes in environmental monitoring, offering critical data for climate change tracking and showing early commercial efforts in Europe. OroraTech, a German startup with €6 million funding, uses thermal datasets, analytics and AI-driven predictive modelling to address the escalating threat and costs of wildfires.
Weather Forecasting: Advanced weather satellites track global weather patterns, enhancing the accuracy of weather forecasts and helping predict extreme weather events.
US Commercial Success: Spire Global, founded in 2012, has enhanced weather forecasting in the US, proving the capabilities of commercial ventures in improving predictive capabilities.
EU Governmental Initiatives: Europe's Meteosat Third Generation (MTG) satellites by ESA demonstrate governmental success in improving weather predictions.
EU Commercial Debut: Windy, founded in 2014 in the Czech Republic, provides sophisticated weather forecasting services, illustrating how governmental advancements translate into commercial success. ICEYE, a Finnish scaleup, specializes in SAR satellites for all-weather Earth observation.
Disaster Management: Satellites offer real-time data during natural disasters, aiding in disaster response and management.
US Commercial Success: Descartes Labs, founded in 2014, has raised $58 million and provides critical real-time data during natural disasters in the US.
EU Governmental Initiatives: The Copernicus Sentinel-1 satellites by ESA that provided critical data during the 2023 Turkey-Syria earthquake, underscore the EU’s governmental excellence in disaster response.
EU Commercial Debut: Satellites from PlanetiQ, a European startup, provide critical data during natural disasters, helping emergency responders assess damage and coordinate relief efforts. OroraTech, founded in 2018 in Germany, also uses satellite data for disaster management.
C. Telecommunications and Global Connectivity Increasing demand
The digital divide remains a significant issue, making the expansion of global connectivity vital. Satellites play a crucial role in expanding internet and communication access to underserved and remote regions, effectively bridging the digital divide. The increase in investments has led to heightened competition and innovation and has enabled new business models such as mega constellations—systems utilizing hundreds or thousands of satellites in Low Earth Orbit (LEO) that deliver services such as low-latency broadband.
Global Broadband Coverage: Constellations like SpaceX's Starlink and OneWeb deploy large numbers of low Earth orbit (LEO) satellites to provide high-speed internet access worldwide.
US Commercial Success: SpaceX's Starlink project, initiated in 2015, has demonstrated the commercial viability of providing global broadband coverage through a large constellation of low Earth orbit satellites.
EU Governmental Initiatives: The Connecting Europe Facility (CEF) aims to enhance digital infrastructure and connectivity across Europe, showcasing governmental commitment.
EU Commercial Debut: KLEO Connect, founded in 2016 in Germany, is working towards providing global broadband coverage, marking an important step in European commercial space ventures.
Socio-economic Development: Improved connectivity facilitates economic growth, education, healthcare, and social inclusion in regions that were previously isolated.
US Commercial Success: Viasat’s efforts in the US show how improved connectivity drives socio-economic development. Kymeta is developing innovative antenna technology to improve connectivity in remote and underserved areas.
EU Governmental Initiatives: The Digital Europe Programme reflects the EU's dedication to supporting digital transformation.
EU Commercial Debut: SatADSL, founded in 2011 in Belgium, is leveraging satellite communications to provide internet access in Sub-Saharan Africa, for socio-economic benefits, driving development and inclusion.
D. Frontier Needs
Addressing the pressing challenges of resource depletion and scientific advancement is critical for future sustainability. Space technology holds immense potential for addressing some of the most pressing challenges related to resource depletion and scientific advancement:
Extraterrestrial Mining and Resource Extraction: As Earth's natural resources dwindle, space offers new frontiers for mining. Asteroids and the Moon are rich in valuable resources such as platinum group metals and helium-3, which could be harnessed for various industrial applications.
US Commercial Success: The Commercial Space Launch Competitiveness Act of 2015 is clear: American companies can extract resources from asteroids and sell them. Companies like AstroForge, which is working toward mining platinum from an asteroid, Interune, a startup aiming to harvest He-3 from the lunar surface, or Karman+, which is developing technology for mining water from near-Earth asteroids, are in the race.
EU Governmental Initiatives: The Luxembourg Space Agency has been a pioneer in advocating for space resource utilization, attracting companies to develop technologies for asteroid mining, underscoring European potential.
EU Commercial Debut: Still at the beginning. UK based Asteroid Mining Corporation is working on robots called SCAR-E, designed to drill into asteroids, process what they extract on-site in space and then send the materials to Earth via commercial spacecraft.
Microgravity Research: The unique conditions of microgravity in space enable groundbreaking research in life sciences and material sciences. This research could lead to the development of new drugs and materials with properties unattainable on Earth.
US Commercial Success: Made In Space, founded in 2010, has revolutionized microgravity research and manufacturing, proving the commercial opportunities.
EU Governmental Initiatives: ESA’s European Space Research and Technology Centre (ESTEC) supports groundbreaking research in microgravity, showcasing European commitment.
EU Commercial Debut: Yuri, a German company, or SpacePharma, an Israeli startup with European operations, are both developing microgravity research platforms for pharmaceutical and biotechnology applications.
Pull Factors: Technological Progress and Governance Changes
A. Political Context and Support
Government support and international collaboration are essential for the advancement of space technology. Governments worldwide are significantly increasing their investments in space technology, driving innovation and fostering international collaboration:
Increased Investment: The U.S. government boosted NASA's budget to $23.3 billion in 2023, emphasizing lunar exploration and Mars missions. Similarly, the European Space Agency (ESA) secured a record budget of €14.4 billion for 2020-2024, focusing on Earth observation and satellite navigation. There’s also positive signs of States and innovation funds increasingly investing in spacetech. The French government for example announced it will dedicate €400 million to purchasing the first flights aboard the rockets of four of the country’s launch startups, which will be supplied through the France 2030 initiative.
International Collaboration and Competition: Geopolitical dynamics have led to both collaboration and competition in space exploration. The Artemis Accords, led by the United States, aim to establish norms for lunar exploration and have been signed by multiple countries. Concurrently, nations like China and India are accelerating their space programs, fostering a competitive environment that drives technological advancements.
B. Technological Advances and Access
Technological innovation is lowering the barriers to space access, making it more commercially viable. Technological innovations are making space more accessible and cost-effective, paving the way for new entrants and increasing commercial viability:
Reusable Rocket Technology: Making rockets reusable is drastically reducing the cost of sending payloads into space. These progress should enable more newspace ventures to afford and access launching capabilities for lower costs and shorter deadlines. Hopefully more of theses emerge soon.
US Commercial Success: SpaceX, Blue Origin, and Relativity Space are investing in the development and commercialization of new technologies such as reusable launch vehicles. SpaceX’s Falcon 9 and Starship have revolutionized launch technology by making rockets reusable, drastically reducing the cost of sending payloads into space.
EU Governmental Initiatives: ArianeGroup is developing the Prometheus reusable rocket engine, aiming to significantly cut launch costs and showcasing Europe's talent.
EU Commercial Debut: Skyrora, a UK startup, is developing reusable launch vehicles, further reducing the cost of space access and illustrating early commercial ventures in Europe.
Satellite Miniaturization: The development of small satellites, including CubeSats and NanoSats, has transformed space technology. These cost-effective and versatile satellites are used for a variety of applications, from Earth observation to communication.
US Commercial Success: Planet Labs’ advancements in satellite miniaturization in the US demonstrate the significant impact of commercial innovations.
EU Governmental Success: ESA’s OPS-SAT showcases Europe’s governmental achievements in cutting-edge satellite technology.
EU Commercial Debut: NanoAvionics, a Lithuanian startup, represents commercial success in Europe by specializing in small satellite platforms.
Additive Manufacturing: Innovations in 3D printing, robotics, and advanced materials are enhancing the production of space components, enabling the construction of large space structures and more efficient satellites.
US Commercial Success: Relativity Space, founded in 2015, has been pioneering advanced space manufacturing with 3D-printed rockets. It uses large metal 3D printers to create Terran 1, the world’s first 3D printed rocket, and the first fully reusable, entirely 3D printed rocket, Terran R.
EU Governmental Initiatives: ESA’s MELT Project focuses on developing 3D printing technologies for producing spacecraft components in space, showcasing European talent and innovation.
EU Commercial Debut: Here, greater potential should be captured, as it is still timid with companies like Orbital Composites in Switzerland, or US companies with EU-based subsidiary, such as Made In Space Europe, out of Luxembourg, that is developing 3D printing technology for manufacturing in space.
C. Higher Sustainability Standards
As the world moves towards sustainable development, space activities must align with these goals. The emphasis on sustainability is driving new innovations in space technology, aligning with global environmental goals:
Space Debris Management: Initiatives to manage space debris are becoming increasingly important to ensure the long-term sustainability of space activities. In May 2023, ESA announced a partnership with Swiss startup ClearSpace to develop technologies for removing space debris, aiming for a launch in 2025.
US Commercial Success: Astroscale US, founded in 2013, has been pioneering space debris management, demonstrating commercial success in ensuring sustainable space operations.
EU Governmental Initiatives: ESA’s Clean Space initiative showcases Europe’s governmental focus on sustainable space activities and debris removal.
EU Commercial Debut: Infinite Orbits, a French startup, develops life extension satellites using autonomous vision-based navigation technology
Eco-friendly Propulsion Systems: Developing propulsion systems that are less harmful to the environment is a growing focus, with the aim of reducing the carbon footprint of space missions.
US Commercial Success: Rocket Lab, founded in 2006, is pioneering eco-friendly propulsion systems, showcasing commercial viability and environmental responsibility.
EU Governmental Initiatives: ESA's Green Propellant Infusion Mission (GPIM) is testing a new, less-toxic propellant that could replace hydrazine, highlighting European talent and innovation.
EU Commercial Debut: Avio, an Italian aerospace company, is developing environmentally friendly propulsion systems for rockets. Exotrail, a French startup, specializes in electric propulsion and mission management solutions.
D. New Commercial Use Cases
Emerging commercial applications in space are unlocking new opportunities, driving financial and strategic investment alike to new potentially high return activities in space:
Microgravity Manufacturing: Manufacturing in the microgravity environment of space can produce products with unique properties, offering significant commercial potential.
US Commercial Success: Made In Space’s success in microgravity manufacturing, founded in 2010, highlights the commercial opportunities in this field.
EU Governmental Initiatives: ESA’s Space Factory initiative supports Europe’s governmental efforts in microgravity technology.
EU Commercial Debut: SpacePharma, an Israeli startup with European operations, is developing microgravity research platforms, highlighting early commercial efforts in Europe. Yuri, a German startup, utilizes microgravity to develop and manufacture superior biotech products.
High-speed Internet Access: Satellite constellations provide high-speed internet access to remote and underserved areas, creating new markets and revenue streams.
US Commercial Success: SpaceX’s Starlink, initiated in 2015, is providing high-speed internet access to underserved areas.
EU Governmental Initiatives: The Connecting Europe Facility (CEF) enhances Europe’s digital infrastructure, reflecting governmental commitment.
EU Commercial Debut: OneWeb, founded in 2012, showcases the commercial success of providing global internet access through its satellite constellation.
AI and Data Analytics Applications: The fast-growing space data-as-a-service market, where specialized companies deliver high-quality data directly to their customers, is another key driver. Leveraging space-based data for applications such as agriculture, disaster management, and environmental monitoring is creating new business opportunities for companies and governments alike.
US Commercial Success: Privateer, which has acquired Orbital Insight, leverages space-based data for various applications.
EU Governmental Initiatives: ESA’s Earth Observation Program supports the use of satellite data for environmental monitoring and disaster response.
EU Commercial Debut: Kayrros, a French startup, specializes in using AI and satellite data for monitoring environmental and industrial activities, illustrating early commercial success in Europe.
What to remember? Simply that spacetech is not only about moonshots. There are tones of other stakes linked to it, and a full economy building up there. The potential for companies operating in the space ecosystem is yet to be realized, and investment opportunities are tremendous, as stars now align in many aspects (poor pun intended). Recent advances in technology, rapidly increasing private sector investment, and rising demand for space data and related products and services are propelling growth in the sector.
If the US has already embraced commercial space, yet Europe is still mostly investing in space via governmental agencies and with established players, and would benefit a lot from more private capital going to new space ventures. Lots of things to be done!
So yes, I am positive that NewSpace is not only here to stay, but building itself as a tremendously attractive frontier for investors.
Now, where do we start? Let’s map it out. I did some attempt of a comprehensive (very much MECE) mapping here. Check it out!