What Can The UK Space Industry Expect in H2 2023?15th Aug 2023
As the dust gradually settles on the first seven months or so of 2023, more is becoming apparent regarding the growth in this time, as well as the potential outlook for the rest of the year. Here, we present our prognosis for the UK space industry prognosis for H2 2023.
The UK Government claims that the British space sector has grown at a faster pace than anywhere else in the world. Figures released show a value increase of £1bn to £17.5bn in the industry, with £635mln of investment attracted.
Q1 2023 saw Britain’s hopes of a successful orbital launch dwindle, and the second half of the year doesn’t look like it will bring that elusive launch either. That said, there are plenty of positive developments in the country and in the global outlook.
The UK Space Agency has promised to establish the UK as “one of the world’s most innovative and attractive space economies.” But will we see signs of this in H2 2023?
What We Learned in Q1 and Q2
Globally, the investment in the SpaceTech industry dropped in H2 2022, but a bounce back globally in the first quarter of 2023 was largely led by European companies.
Q2 saw something of a plateau in investment in Europe, and the US deals as well as Asian deals were worth far more than those taking place in the UK. However, a plateau was expected and is far better than a dip. As Seraphim notes in their Seraphim Space Index Q2 2023 report: “The total number of deals completed within Q2 have fallen by 31% from the previous quarter (88 vs 128), but remains higher than any point prior to Q4 2021. The TTM period has recorded the highest number of SpaceTech deals to date. Each of the last 3 quarters have set all time records for the highest total number of SpaceTech deals.”
San Francisco-based satellite startup Astranis Space Technologies Corp. secured one of the biggest deals as they found $200M in fresh equity and debt funding. However, it’s just one of many deals taking place worldwide in the private Space Industry.
Investment continues in the UK, and has largely been justified given that huge growth in the economic contribution of the space industry. The UK Space Agency Accelerator Explore programme is one such example, but it focuses more on grass roots.
The US industry is more mature, and the gap in European and North American deals sizes remains largely consistent in the first half of 2023. North American deals are around twice the size of those in Europe, according to the Seraphim report.
However, one interesting note from the report is the fact that in a trailing twelve-month period, the UK ranks third globally for investments, with 39 deals and £237 million invested. This is tiny in comparison to the £1.6 billion in the US, but comparable to China making £296m across 64 deals.
Speaking about mergers and acquisitions, VP of Seraphim Space Maureen Haverty explained: “We can see that acquisitions are no longer reserved for the deep pockets of legacy Space companies.
Industry figures are not “skewed” per se, but certainly are still dominated by industry giants. For instance, the Q1 report from Bryce Tech showed us that 763 spacecraft were launched by SpaceX. To put that into perspective, the second and third most prolific launchers of craft were the Indian Space Research Organisation (ISRO) and the China Aerospace Science and Technology Corporation (CASC) with 39 and 31 launches, respectively.
The Outlook For H2 2023
A lot of the buzz and talk in the industry surrounds launches. The space race has seen numerous companies aiming to make their mark and become the first successful vertical launch in the UK. While this is just one part of the industry, downstream industry applications may be crucial, along with the areas where the UK has always proven its worth.
Smallsat Developments Could Be Crucial
The country is now playing an important role in developing international partnerships but also leading the way in terms of innovation. The birthplace of the small satellite, the UK is continuing to blaze a trail in this area with both large companies and small startups developing exciting satellite tech.
We recently launched the League Table of UK Satellite Manufacturers which includes some exciting upstart businesses helping to further the UK industry.
One such example is In-Space Missions, who can provide a full-scale service from design and manufacture to integration, they’ve made some popular small 1U Cubesats as well as Ada and Bell smallsats. The company is already supplying the likes of ESA and UKSA.
Unfortunately, the Prometheus-2 made by the company was one of the satellites due to be delivered into orbit in the failed launch in January, but the contract still means that In-Space Missions have a contract to support the Ministry of Defense with science and technology activities. They are continuing to work on new satellites and satellite tech.
More Government Support
The National Space Council has recently been reinstated, meeting once again in July 2023 and promising more support via the “National Space Strategy in Action” document.
This report covers various priority areas, including:
- the development of a Space Sector Plan to promote economic growth and resilience
- the establishment of space clusters within the UK space ecosystem
- a space workforce action plan
- a review of space regulations to ensure effectiveness and innovation
- the UK’s long term approach to civil capabilities and defence highly assured capabilities for space
- progress of the Defence Space Strategy
The report certainly talks a good game. Dr Paul Bate, Chief Executive of the UK Space Agency, spoke about the strategy:
“The National Space Strategy in Action highlights the significant progress made towards delivering the government’s ambition to make the UK one of the most innovative and attractive space economies in the world.”
Schemes like the UK Space Accelerator are aiming to support the UK industry, which already employs almost 50,000 directly in its space industry.
Groundwork For Launches (But No Actual Launches)
Rome wasn’t built in a day, and the same theory seems to apply to spaceports. The Pathfinder project originally aimed to launch from SaxaVord in Unst in 2022, but the goalposts have been moved.
Director of launch at the UK Space Agency Matt Archer explained the importance of the spaceport and reiterated the commitment. “SaxaVord Spaceport, alongside other spaceports in the UK, will help further the UK’s position as Europe’s leading launch destination, building on and growing our existing small satellite industry by offering small satellite manufacturers a direct end-to-end route to launch.”
He went on to explain that “Construction is well underway at the site and these facilities will enable vertical orbital launches to take place as we look towards a 2024 launch.”
A lot has been made of the delays and failures in UK launches. Greg Clarke claimed in an address to government that the failed Virgin Orbit launch was a “disaster” and that the UK had turned “toxic for a privately funded launch”.
In fact, the UK has made great strides and has multiple upcoming launches, even if they have been delayed. And then delayed again.
The CAA has explained that there are “a further 25 applications at various stages in the pipeline from aspiring spaceports, launch and satellite operators, including some from Scottish businesses. The UK Civil Aviation Authority is also engaging with a further 20 potential applicants, including three UK spaceports.”
Though it is impossible to ignore the economic challenges that the UK is facing, along with much of the rest of the world, it is undeniable that there are significant obstacles.
That said, the saving grace for the industry in general is that it is contributing rather than taking from the UK economy. However, this won’t directly help companies that are in fiduciary trouble, so it is could prove a testing six months for space companies.
An Industry Moving Quickly
Developments in the industry are often fast to come about. With UK craft in live testing and continuing work on satellites, craft, and innovative technology, there is every chance of further exciting announcements over the next six months, many of them taking the UK closer to the goal of boasting a leading space economy.