$178 Billion Flows into Space Investments in Past 10 Years

From SPACs to billionaire passion projects, space is capital's new frontier.

The total equity investment over the last decade in the space economy was $177.7 billion, according to Space Capital. It was spread across 1,343 unique companies, and firms in the U.S. and China collectively accounted for 75% of that amount. They were followed by Singapore (6%), Britain (4%), Indonesia (3%) and India (3%). The total investment in infrastructure (launch, satellites, logistics etc.) has jumped to a record $8.9 billion in 2020. Of course, the space economy isn't just rockets, spaceships and tourism. In fact, companies involved in applications, like positioning, navigation and earth observation, account for the lion's share of funds each year.

space economy investing
Source: Space Capital.

Backed by Billionaires

The great beyond is on investors' minds after NASA's Mars rover Perseverance successfully landed yesterday, ending a 293 million mile journey that took over 203 days. But interest in space technology companies has been rising since 2013, as seen in the chart above, with famous names like Elon Musk (SpaceX), Jeff Bezos (Blue Origin) and Richard Branson (Virgin Orbit) making headlines with their own endeavors. Recently Salesforce co-founder Marc Benioff-backed Astra Space announced it's going public via SPAC at a $2.1 billion valuation, and it just hired Apple veteran Benjamin Lyon as Chief Engineer. Cathie Wood's famed ARK Investment Management plans to launch an ARK Space Exploration ETF. Speculation is currently underway about what the holdings may be. Top holdings in the other two space ETFs - Procure Space ETF (UFO) and the SPDR S&P Kensho Final Frontiers ETF (ROKT) - include Virgin Galactic (SPCE), Maxar Technologies (MAXR), Raytheon Technologies (RTX), Loral Space & Communications (LORL) and Gilat Satellite Networks (GILT).

 The Next Frontier

Wood is bullish about the sector because "the costs associated with launching, with rockets themselves, with antenna – they're all coming down dramatically." Another point mentioned by Morgan Stanley's Adam Jonas is that the sector is "increasingly existential" and the next frontier of human innovation. For example, he said, if we build flying cars we'll need constellations of thousands of satellites to guide us, high-speed travel will require leaving the Earth's atmosphere, to tackle climate change we could use space-based, Earth observation technologies. The bank sees the global space industry generating revenue of over $1 trillion by 2040, up from $350 billion in 2020. Satellite broadband is expected to represent 50% of the projected growth of the global space economy by 2040.

"The demand for data is growing at an exponential rate, while the cost of access to space (and, by extension, data) is falling by orders of magnitude," says Jonas. "We believe the largest opportunity comes from providing Internet access to under- and unserved parts of the world, but there also is going to be increased demand for bandwidth from autonomous cars, the Internet of things, artificial intelligence, virtual reality, and video."

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