https://ift.tt/3AevHfU
Topline
Space companies including SpaceX and Sierra Space received nearly $15 billion of private investments in 2021—including a whopping $4.3 billion in the fourth quarter, a record-setting year for a booming industry as investors continue to bet on the “space economy.”
An illustration of the SpaceX Starship human lander that will carry NASA astronauts to the Moon … [+] under the Artemis program.
SpaceX/Nasa via ASSOCIATED PRESS
Key Facts
Space infrastructure companies received a record $14.5 billion of private investment in 2021, a more than 50% increase from $9.8 billion in 2020, according to a new report Tuesday from New York-based firm Space Capital.
Investments in space companies hit a new high in large thanks to what was also a record-setting fourth quarter, with $4.3 billion raised in a series of funding “mega-rounds.”
The top deals last quarter included Sierra Space, which raised $1.4 billion in a late stage funding round, $337 million raised by Elon Musk’s SpaceX and $250 million by Planet Labs after going public via SPAC in December 2021.
There has been $252.9 billion in cumulative global equity investments into 1,694 different companies in the space economy since 2021, according to Space Capital’s report.
“As we look ahead, we see tremendous opportunities to scale mass adoption of the existing infrastructure as we look for radically new approaches to build and operate space-based assets,” Space Capital managing partner Chad Anderson said in the report.
The firm is especially excited about SpaceX’s Starship, which is expected to come online in 2022 and will not only usher in a “new phase of infrastructure development,” but also “completely change how we operate in space.”
What To Watch For:
Despite 2021 being a banner year for the industry, Space Capital warned that the changing market environment could affect space investment activity this year. The recent flurry of newly-public space companies, many of whom are years away from profitability, may slow and see their shares adversely affected as rising interest rates slam technology and growth stocks. “Much of the momentum we saw in 2021 came at the cost of deep diligence, which increases the risk for investors,” Anderson wrote. “Not all SPACs are created equal,” he said, adding, “public markets have started the year with a selloff and, if it continues, venture firms may not find it as easy to raise record-setting funds as they did last year.”
Crucial Quote:
“It’s important for investors to realize that investment in the space economy requires specialist expertise,” according to Space Capital’s report. “We believe this will become more apparent in 2022 as some of these overvalued companies come back down to Earth and the quality companies rise above.”
Further Reading:
Financial Services
