The UK is the second-largest nation for space investment, report reveals18th May 2023
A new report from the UK Space Agency (UKSA) shows that the nation is the second largest in the world when it comes to private capital investment. The report, in collaboration with leading professional services network PwC, highlighted that the UK is the top nation within Europe garnering commercial investment. It followed only the United States, and received 17% of the global inflow.
The report, called ‘Expanding frontiers – The down to earth guide to investing in space’, was released on Tuesday, 16th May, and is focused on revealing the “wealth of opportunities” within the UK’s space sector, and how investors can seek to improve current challenges with the help of space.
2021 was the biggest year for ‘New Space’
New Space was a phrase coined in the early 2000s to represent the newer frontier of the space industry and describe the move away from only government-run missions to widespread commercial space activity. Space is now accessible to anyone, and 77% of the industry is dominated by the commercial market, proving the need for space investment.
According to the report, the global space sector is expected to grow up to 11% per year over the next decade. While venture capital investment has seen a massive increase between 2015 and 2022, 63% of these investors joined the sector in 2021.
Further, between 2005 and 2021 the global space economy grew over 2.5 times, making up for 6% of growth every year. But 2021 saw 9% of growth, pushing the industry to the “higher end” of large sectors such as aerospace, defence, automotive, and pharmaceuticals.
“This report shines a light on the breadth and depth of space investment opportunities,” said Craig Brown, Director of Investment at the UKSA. “From today’s satellite communications to the future of orbital assembly, space has taken on an increased significance as a deeply embedded part of the global economy that is poised to grow at up to 11% per annum to 2030.”
Space a ‘hidden utility’
With the growth of satellites set to launch over the next decade, the report highlights the importance of utilising the technology to address challenges on Earth, such as climate change and improving healthcare.
The past few years have seen $47 billion worth of investments in more than 600 companies which represent the three stages of the “space value chain”, according to the report, which highlights the “diverse ecosystem” of the industry.
First, $22.6 billion has been deployed across 210 spacecraft manufacturing and launch vehicle companies, representing the ‘upstream’. Secondly, $5.6 billion has been invested into spacecraft operations and in-orbit management across 152 companies, representing ‘midstream’. Lastly, $19.6 billion has been invested in spacecraft-derived data, applications, and services across 267 companies, mostly within Earth Observation (EO), satellite communications, and satellite position, navigation, and timing (PNT).
Many of these companies are actively addressing challenges like OneWeb’s satellite constellation to provide internet access for the remotest of areas, or Xona Space Systems’ satellite constellation that provides accurate positioning for “more reliable” autonomous vehicles.
“Our analysis shows that there are opportunities for investors of all stripes; the industry contains asset-light and technology-driven businesses, as well as infrastructure assets and supporting services businesses, all of which stand to benefit from the significant growth of the global space industry,” said Matt Alabaster, partner at PwC.
UK companies leading space investment
According to the report, two companies in the UK are leading the charge when it comes to investment: Space Forge and OneWeb. Space Forge, an in-space manufacturing company, raised Europe’s highest seed round for a space company in December 2021, garnering £7.7m from Type One Ventures, World Fund, and SpaceFund.
“We’ve spear-headed new investment into the UK space sector from homegrown and valued international partners,” said Joshua Western, CEO and co-founder of Space Forge. “The growth in our company and this sector is testament to the untapped potential of the UK space ecosystem.”
OneWeb, the satellite connectivity company, finished its constellation in March, and will soon provide internet and compete against SpaceX’s Starlink. After being rescued from US Chapter 11 by a purchase of the company from the UK Government and Bharti Global, OneWeb secured $2.4 billion of equity investment in May 2021.
The report calculated a median 400% increase in deal size for early-stage investments, with Space Forge and OneWeb at the forefront of this funding.
Please see here for the full report.