by Douglas Messier
Investment in commercial space companies soared to $5.7 billion in 2019 from $3.5 billion the year before, but the bulk of the funding went to a handful of companies most of which are run by billionaires, according to a new report from Bryce Space and Technology.
“SpaceX and Blue Origin drew an estimated $1.9 billion in combined investment during the year, while low-Earth orbit (LEO) broadband venture OneWeb attracted another $1.25 billion,” the annual report said. “Sir Richard Branson’s space tourism start-up Virgin Galactic raised more than $682 million in 2019. A reverse merger with special purpose acquisition company Social Capital Hedosophia, raised $500 million and paved the way for public trading of Virgin Galactic shares, one of the year’s more notable transactions.
“Together these four companies accounted for nearly 70% of the 2019 total. The continued ability of sector heavyweights like SpaceX to raise capital is one of the major storylines of Start-up Space 2020,” the document added.
U.S.-based Relativity Space, which is manufacturing its small-satellite launch vehicle using additive manufacturing (3D printing), and China’s Qianxun Spatial Intelligence, a Beidou-enabled high-precision location service provider, accounted for an additional $280 million in investment by raising $140 million apiece.
“In addition to the six companies mentioned above, another 129 start-up space ventures received investment in 2019. In total, 135 startup space ventures received investment in 2019, a 34% increase over 2018, the previous record,” the report stated.
“Excluding SpaceX, OneWeb, Blue Origin, and Virgin Galactic, total investment in start-up space was $1.8 billion in 2019, down slightly from the $1.9 billion excluding those companies the year before,” the document added. “However, a sharp increase in the number of rounds with undisclosed investment (based on publicly available data)—38 in 2019 compared to 15 in 2018— suggests that the actual total for the year is above $1.8 billion.”
Venture capital accounted for $4 billion of the $5.7 billion in investment in 2019.
“About 68% of that, or about $2.7 billion, is attributable to SpaceX, OneWeb, and Virgin Galactic. The $1.3 billion raised by the other companies represents a 17% drop from $1.6 billion in 2018, although, again, the number of rounds with undisclosed magnitude invested was substantially higher in 2019,” the report stated.
The number of American firms receiving investments rose slightly from 53 in 2018 to 56 last year. The number of start-ups that received investment outside the United States increased from 47 to 79, the report said.
The Bryce report was optimistic that commercial space investment will continue to grow.
“Yet even with all of this record-breaking investment in start-up space ventures, financial sponsors report that, from their standpoint, there’s an enormous amount of available capital looking for opportunities,” the report stated. “John Stack, managing director and head of U.S. aerospace and defense investment banking at Canaccord Genuity LLC said that with an investment capital pool of some $1.6 trillion available, ‘investors continue to seek companies with strong growth potential. Furthermore, despite industry consolidation over the past few years, the publicly traded aerospace and defense companies also have meaningful capacity to acquire other businesses.’”
You can download the full report here.