For many years, space was closed and belonged exclusively to government departments. Recently, however, the role of private companies in the use and development of outer space has changed: more and more players are appearing on the global space market. It is currently valued at about $366 billion.
Revenue from various space-related industries is expected to grow to $1 trillion by 2040.
Private business in space
The space industry in the XXI century was created by Elon Musk alone. Even though he experienced failure after failure, he continued to fantasize. SpaceX managed to get into space only for the fourth time. The company is now worth $46 billion. The whole world is open-mouthed, watching what she's doing.
So the actions of one person led to the fact that there was a tectonic shift — governments stopped funding space development alone. There are private companies and private investors who are willing to risk everything to live a life of books about the future.
It is worth recognizing that the era of giant centralized projects, forced by the government, is over. The future of space belongs to innovations and private companies, the appearance of which makes the market competitive, and therefore contributes to the rapid development of the industry.
Promising areas for investment
If we talk about technologies, today we can identify the following promising areas in terms of development and investment.
Telecommunications, which are now developing not only on Earth, but also in space. For example, the Internet infrastructure. Today, the most commercially promising satellites are for telecommunications. For example, Musk in the Starlink project is now making cheap efficient Internet in space. This is possible thanks to thousands of low-orbit satellites. Now it is part of SpaceX, but in the future, it may grow into a separate independent direction.
Satellites linked to various sensors and scanners are another promising technology. They can be used, for example, to track methane leaks, as the canadian company Iris did. Their new satellite will track emissions of this gas — it is one of those that affect climate change. Special satellites monitor the spread of methane and take a daily global snapshot of methane emissions on Earth. In the future, this may help scientists develop constructive measures to combat global warming.
Mining on asteroids is another direction. According to some estimates, it is quite possible that over the next 50-60 years we will exhaust the supply of key elements necessary for modern industry and food production. At the same time, there are countless bodies in the Solar system that can contain minerals, precious metals and ores necessary for the Earth's economy. Asteroids will produce not only water, but also gold and other valuable metals. Space technologies will help the next generations.
Technologies related to sending satellites into space. Now rockets take off with the help of balloons, such a company is, for example, in our portfolio. When strong enough materials are found, elevators will go into space, which is much more efficient than rockets. Perhaps in the future it will be possible to create some kind of nanocanat, very strong, like a diamond, on which you can climb directly into space.
Space travel. Richard Branson's company Virgin Galactic is close to commercial disclosure of this topic, they are already selling tickets for $200-250 thousand, for which people can be in zero gravity for a few minutes. The first flight is scheduled for early 2021 (if the tests are successful).
Why do space projects attract investors?
First, people like big dreams.
Secondly, this is a new industry — many opportunities, few competitors, and much has not yet been studied and done.
Third, early mover advantage — if the funder proves that its technology works, it can attract a lot of money and it will be difficult for others to catch up with it. This is where the advantage of the former works.
For example, we recently looked at a company that makes gas stations in space. We decided not to invest, but it's a good idea: the rocket refuels in space and flies on. And this, believe me, is just the beginning: in the future, there will be many things in space. I believe that one day it will be colonized. It will be a giant industry.
The reaction of investors
Space has become one of the most attractive areas for investment thanks to private initiatives and opportunities to improve existing technologies to achieve new results. The peculiarity of startups in the space industry is that the difference between "achieved" and "not achieved" is huge. It's all or nothing.
- venture capital investors have invested more than $5.7 billion in 135 space startups around the world;
- the number of non-US space startups exceeded the number of us projects for the first time (79 vs. 56).
- Space startups are most actively supported by venture funds-they account for 51% of the total number of investments.
Business angels are in second place — 22%. There are several famous people among them. For example, one of the early investors in Momentus (a portfolio company called One Way Ventures) was Tony Robbins.
At the same time, only a couple of large funds invest in space.
Despite the General opinion that the commercial space market is weak in Russia, there are also large players in the space market, and small startups such as Kosmokurs, Sputnix, lorett, and Avant Space.
How and where to invest
In any investment, especially in the early stages, success depends on who runs the company and what they are capable of.
In space projects, the team needs to be looked at especially carefully. In this area, accuracy is important, the ability to learn from your mistakes, correct them and not repeat them. Founders need to be confident that they can design and build a product that won't break. It is also important to be able to bring the idea to mind and attract enough capital to complete the technology and win the market (space is a very capital-intensive industry). These factors are more important at the initial stage than revenue, because they predict its future potential.
Our Foundation looks at space carefully, as it is a zone of my personal interests, and we have managed to invest in several bright projects.
Momentus. The founder is Russian entrepreneur Mikhail Kokorich, who has set an ambitious goal — to make the basis of the rocket engine water, which is safer than other types of fuel and in the future can be extracted directly in space: on the moon, Jupiter, asteroids. Now among the project partners are SpaceX, Lockheed Martin and NASA.
We invested $500k in Momentus in the seed round a couple of years after they left Y Combinator. Momentus recently announced that it is entering the NASDAQ exchange with a valuation of $1.2 billion.
Lynk.world. The idea is to send SMS messages from a satellite. Thanks to their technology, a person can send a message from the top of mount Everest, where there is not the best Internet coverage, and the recipient will receive it, for example, on the red sea coast.
Two years after investing in them, on February 24, 2020, Lynk. world successfully transmitted the world's first text message from space to an unmodified mobile phone on Earth. The company will now begin commercial operation of the world's first mobile communications tower in space. It plans to connect all 5.2 billion mobile phones on the planet to it.
Spaceryde makes rockets that go up into space in a balloon and then take off from there on jet engines. It is one of the world's first launch systems designed specifically for small satellites without the need for large rockets. We can say that this is the first space taxi.
Of the big companies, Virgin Galactic and SpaceX are worth mentioning.
Virgin Galactic plans to organize tourist suborbital space flights and launch small artificial satellites. The company is working with NASA to develop a passenger supersonic aircraft designed for tourist flights into space. Today, the company is valued at $3.95 billion. Personally, I wouldn't invest in it. In my opinion, the project is overrated, and today they already have a lot of competitors.
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SpaceX, in my opinion, is the most promising project today, it is estimated at almost $50 billion. This is not such a big price for the future that the company is building. I believe in it. But it is not easy to buy their shares: the demand is greater than the supply. This is a secondary market, Musk sometimes makes the rounds, and they are always crowded.