The Space economy continues to soar. 2020 was another year of new landmarks. The COVID-19 pandemic inflicted terrible suffering on people and economies around the world but we, in the Space and geospatial communities, were fortunate that our industry was virtually ‘Covid-proof’. In fact, the coronavirus cloud had a silver lining for some companies. Central banks around the world wisely pumped capital into their respective markets to protect the economies from the shock of businesses suspended (and in some cases ended) by the pandemic. The capital infusions further reduced the already low cost of borrowing, and lower interest rates facilitated access to capital.

A 360-degree view
In recent years, big deals have dominated the Space investment landscape. In 2019, 70% of the total investment went to four companies: SpaceX, Blue Origin, OneWeb and Virgin Galactic. Investors were happy as SpaceX achieved milestones in the Starlink and Starship segments, and musketeers were glad to see Tesla report a profit for 2020 — the first year in which either Tesla or SpaceX have reported a profit. Another source of excitement in the Space investment world is Special Purpose Acquisition Companies (SPACs). A SPAC is a company that raises capital through an IPO to acquire another company. In the current financial markets, the rates are so low that fixed income investments rarely offer attractive returns to investors. As a result, SPACs are hot right now. Virgin Galactic was the first Space company to use a SPAC; since then, Momentus, AST, Astra and others have followed that course. Further, the launch segment continues to attract the most private equity and venture capital. A number of small companies have reached new milestones in this segment. For instance, Rocket Labs has achieved several successes, and Astra and Relativity had solid financing.

Expanding China; consolidating industry
There has been a surge in non-US Space startups obtaining financing. China’s Space industry is particularly worth noting. China launched more rockets (39) than SpaceX (25) last year. That’s an unfair comparison — SpaceX is a company not a country — but it should give people some perspective on how fast China is growing. France and India have been in the launch industry longer, but China has invested billions in Space, and is making a lot of progress. On the other hand, the low cost of capital, particularly debt, will lead to more consolidation, as industry leaders seek new capabilities and weaker companies struggle to find their footing. The incumbent telecommunications sector is ripe for consolidation. Companies will make acquisitions to add to capabilities and reach new markets.

Space to check Climate Change
The Space industry been helping monitor and manage the risk of Climate Change for years. Although America has lagged in that effort in recent years, two factors will help the US become active in that respect again:

• The election of President Joe Biden; and

• The announcement by financial leaders like BlackRock ($3T AUM) that they would include ESG standards as they evaluate the companies in which they invest.