Advances in Space Technology Increase Investor Interest


When Lisa Rich made a phone call with investors in March to raise money for the Aurvandil Acquisition, a company that acquires startups focused on space technology, her goal was to bring in several million dollars.

Aurvandil’s board member, Ms. Rich, arrived at her destination in almost an hour.

“This won’t happen,” he said, laughing.

Richard Branson flew to the edge of space On Sunday, on a ship built by his company Virgin Galactic. Jeff Bezos just Amazon’s CEO resigns, is He will make a space flight on July 20., on a spacecraft built by his company, Blue Origin. And Elon Musk’s SpaceX company It has an agreement with the National Aeronautics and Space Administration. To land the Americans on the moon. But Mongols aren’t the only people with eyes to look at the sky.

Investors are putting more money into space technology than ever before. space ventures Over $7 billion in 2020, double the amount just two years ago, According to space analytics firm BryceTech. Carissa Christensen, CEO of BryceTech, said that this trend continues this year.

The biggest deals will be to companies that launch rockets into space, such as SpaceX and Relativity Space, which announced $650 million in new money last month. Bezos announced that he would fly into space.

But start-ups in every sector of the space industry — including launch and satellite communications, human life support, supply chains and energy — are catching the attention of investors. Astranis, a satellite internet company, signed a $280 million deal in April. Axiom Space, which aims to build the first commercial space station, raised $130 million in February.

“I’ve never seen a market like this,” said Gabe Dominocielo, co-founder of Umbra, which develops satellites designed to take pictures regardless of weather or light conditions. “Over the last year, the amount of phone calls I’ve received – for a start, typically, the startup typically makes a phone call to an investor. Now it’s the opposite.”

Many executives, analysts and investors say the boom was partly due to developments that made it feasible for private companies—not just nations—to develop space technology and launch products into space.

Thanks to technology developed for mobile phones, for example Planet It can afford to build and deploy satellites that can view the entire Earth every day. The analytical capabilities provided by machine learning, artificial intelligence and cloud computing have increased the demand for the data produced by these satellites.

“You can do a lot more and launch more with a smaller satellite,” said Mike Safyan, vice president of Planet, “which enables new types of missions that you can’t do if you’re just building them. A satellite the size of a school bus with very expensive space-specific technology.

Also, satellite companies can now pay for their technology to be put on a rocket, greatly reducing their economic barriers. For example, if a rocket has a capacity of 500 kilograms and a primary payload of 300 kilograms, another company may use 200 kilograms.

Astra, a start-up founded in 2016, wants to make going into space even easier by offering smaller and more frequent launches – positioning itself as a building block of the space industry, similar to the role cloud computing has in enabling web start-ups. The company competes in the small launch market with other and more established start-ups such as: Rocket Lab, but hopes to stand out by targeting even smaller and cheaper launches. Astra has scheduled its first launch with a payload for this summer, and has 50 launches under contract, including Planet and NASA.

“Astra fills this gap in the market where you have hundreds of these companies, they all have new technologies they are developing, and you don’t want to wait until next year when SpaceX can get you there,” Chris said. Kemp is CEO of Astra. “Even if it’s free, even if SpaceX paid me to wait a year, the value of being able to go to space next month is incredibly valuable for a start-up that’s burning millions of dollars a month.”

“The ability to reuse something and make it consistent and reliable is transformative in the space industry,” said Ms. Rich, founder and chief operating officer of Hemisphere Ventures, which has invested in space companies since 2014. Officer of Xplore, a company that designs orbital missions.

The recent wave of deals has also been driven, in part, by a number of special purpose buyouts, such as Ms. Rich’s Aurvandil. These publicly traded front companies, known as SPACS, have the sole purpose of acquiring one or more private companies. they have been one of the hottest trends in the financial world during the past year.

From a beginner’s perspective, merging with a SPAC is an effective way to raise large sums at an earlier stage. It also modifies the account for traders.

Some investors have been wary of newcomers to the space in the past, as technology takes much longer to develop and generate revenue than software like a social media service or an app.

“If you’re at a software company and you distribute an application and it doesn’t work, you start a new application. “This failure could cost a month or two,” he said. “If you have a satellite, you just spend millions of dollars, and if that satellite fails, you lose years.”

But SPACs allow companies to go public earlier than a traditional IPO, giving investors the opportunity to withdraw funds much sooner. The value of the publicly traded company is mostly based on growth projections rather than actual revenue.

Ten companies in the aerospace industry have announced plans for SPAC mergers, seven of them in 2021. Seven of them include Planet and Astra. On Wednesday, Planet announced a merger with dMY Technology Group IV, which is expected to raise $434 million. The merger with Holicity would give Astra about $489 million in cash and allow it to expand fast enough to keep up with what Mr Kemp called “absolutely insatiable” demand.

“Once you get to the point where you need half a billion dollars in capital to build a rocket factory, then you need to go public because you’re past the venture stage of financing,” he said. “This is where SPACs play really well.”

Astra began its merger process in December and went public on the Nasdaq last week.

According to Ms. Christensen of BryceTech, a total of $3.9 billion was raised through the nine SPAC deals, and the companies have a combined corporate value of $20 billion.

Investors, founders and analysts expect the space industry to continue to expand rapidly. Morgan Stanley estimated this field will be a $1 trillion industry from $350 billion in 2020 to 2040.

Ms. Christensen said government contracts are increasing for research missions, both like NASA’s. Artemis moon program and for military and national defense purposes space forceis expected to continue to drive industry development. Others see commercial space travel as a “railway” that will catalyze mass access to the ultimate frontier.

“Everyone is waiting to see if Elon can pull Starship,” said Rick Tumlinson, co-founder of SpaceFund, a venture firm. “And then when it really starts flying, there’s going to be a lag period when people get the business and the things they want to fly with and the finances, so there’s going to be a bump in three years. ”

“It’s like the week before the internet for us,” he said.


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