Italy: A Rising Star with Significant Contributions to the Space Industry

Italy excels in aerospace, with Turin as a top global hub—4th in Europe, 7th worldwide. Home to 160+ aerospace firms and 12,300+ workers. Italy recently secured €1.6B contracts from ESA.

Issue No 53. Subscribers 8130. This article was written with the support of the Italian Space Ecosystem.

Italy from space

We've previously explored the space industries in Singapore and Israel, and those articles generated significant interest. This time, we're turning our attention to a European country, Italy. Italy has a rich history of engineering excellence, with notable inventors like Leonardo da Vinci, Antonio Meucci, and Guglielmo Marconi hailing from its ranks. Today, Italy plays a vital role in the space industry, even though its contributions may not be as well-known.

In 1964, Italy built and launched its first satellite, becoming the third country to do so after the Soviet Union and the United States (in this order). Italy has made significant contributions to the creation of several modules for the International Space Station (ISS). For example, the Leonardo module was constructed by the Italian company Alenia Spazio S.p.A., and the iconic Cupola module was also of Italian origin. Furthermore, Italian astronauts were the first Europeans to visit the ISS, with seven Italians having ventured into space. Italy also manufactures a significant portion of the Cygnus spacecraft, a cargo supply vehicle that delivers supplies to the ISS, including food, tools, and experiments.

Today, Italy can proudly claim the second-largest number (first - Germany) of objects (47 satellites) in orbit among European countries. The Italian Space Agency (ASI) manages the COSMO-SkyMed satellite constellation, featuring satellites in polar orbits that monitor the Mediterranean Basin. Furthermore, Italy has made significant contributions to groundbreaking space missions, including the Mercury-bound BepiColombo, the Rosetta mission to comet Churyumov-Gerasimenko, the Mars Reconnaissance Orbiter, and others. Italy's presence and achievements in space exploration continue to play a vital role in advancing our understanding of the cosmos.

Italy is indeed a part of the European Space Agency (ESA). The agency operates on a cooperative model in which each member country contributes financially to the ESA's budget and, in return, receives contracts and opportunities for projects that are proportionate to their contributions. 

Interesting fact: Italy is among the very few countries to have coverage in the entire aerospace value chain, a result that is reflected in the economics and that has added value in the increasingly close collaboration between universities, research centers, and industry, especially in the aerospace districts, such as those in Lazio, Piedmont and Lombardy, the most important at present.

Italy is one the only EU nations that have a commercially viable launcher that could efficiently sustain their commercial endeavors: Vega-C and its upcoming siblings Vega-E or Vega-Light will seek to propel the IRIDE constellation into orbit.

In 2022, Italy made a substantial contribution of 680.2 million euros to the European Space Agency (ESA), marking the third-largest contribution after France and Germany. During the ESA Industrial Policy Committee meeting, Italy secured contracts totaling 1.6 billion euros. These contracts encompass the development of two Earth observation satellites for the ESA's Copernicus program, the creation of the International Habitat Module for the Lunar Gateway project, and the advancement of technologies aimed at facilitating the return to Earth of an orbital spacecraft that will eventually bring back rock samples collected by NASA's Perseverance rover from Mars (read our article about Mars rovers). Italy's significant investments and contract wins underscore its active role and capabilities within the European space community.

The Strong Space Community in Italy Supported by Public and Non-profit Sectors

Space exploration in Italy has its roots in government initiatives. Italy has a vibrant and diverse space community that involves government agencies, academic institutions, non-profit organizations, and private companies. Some of the main public and non-profit players in the Italian space ecosystem are:

• The central authority overseeing this sector is the Agenzia Spaziale Italiana or the Italian Space Agency. Established in 1988, its mission is to develop, coordinate, and implement Italy's space projects. The agency operates under the aegis of the Ministry of Universities and Research of Italy and represents the country's interests within the European Space Agency (ESA) by delivering the overall strategy vision brought by the Italian interministerial committee on Space Strategies. The first initiative of its kind in Europe. The agency's headquarters are located in Rome. Additionally, the agency includes the San Marco Spaceport, situated in the territorial waters of Kenya (Malindi), which is currently not in use, and the geodesy ground station in Matera, subjected to an ‘upgrade’ thanks to the national Recovery EU program for Space. The annual budget of the Italian Space Agency is approximately €1 billion.

• Italian Aerospace Research Center (CIRA), is a company mainly of public ownership created in 1984 for the purpose of performing research in the fields of space and aeronautics.  370 people currently work for CIRA, mostly in research and in scientific and technological development. CIRA is nowadays under the control of the National Research Council (CCNR).

• The ESA Centre for Earth Observation (ESRIN) - The mission and payload operations of ESA's Earth observation satellites are managed here, and ESRIN is the primary source for the acquisition, distribution, and exploitation of data from these and other non-ESA satellites.

Leading Companies at the Forefront of Italy's Space Industry: Partnerships and Impact

The Italian space sector boasts more than 250 companies, similar to other spacefaring nations. The private sector is composed of a handful of major contractors and a larger number of small and medium-sized enterprises.

Among the giants:

• Thales Alenia Space, a primary subcontractor that has either developed or participated in the creation of numerous satellites, interplanetary stations, the lightweight Vega launch vehicle, and holds unique experience in Europe for manufacturing hermetically sealed space modules on orders from ESA and NASA. They have been involved in projects such as the SpaceLab laboratory module for the Space Shuttle and modules for the International Space Station (ISS). Additionally, the company owns ALTEC, which operates mission control centers. ALTEC plays a crucial role in managing and coordinating space missions and activities.

• Leonardo -  is an Italian multinational company specializing in aerospace, defense, and security (With an annual revenue of 14.7 bln euros in 2022). Headquartered in Rome, Italy, the company has 180 sites worldwide. It is the 12th largest defense contractor in the world based on 2020 revenues. The company is partially owned by the Italian government, which holds 30.2% of the company's shares and is its largest shareholder. 

• Telespazio. In the space sector, Leonardo is active mainly through joint ventures Telespazio (Leonardo 67% - Thales 33%) and Thales Alenia Space (Leonardo 33% - Thales 67%). Telespazio offers a wide range of skills and services from design and development of space systems, launch services management, and in-orbit satellites to Earth observation services, integrated communications, and satellite navigation and localization. 

• Avio S.p.A. is an Italian company operating in the aerospace sector. Founded in 1908, it is present in Italy and abroad with different commercial offices and 10 production sites. Avio operates in:

  • Solid-propellant propulsion for space and tactical propulsion

  • Electronic/electrical control and automation systems

  • Payload adapters

Avio is the Prime Contractor for the new European launcher Vega and sub-contractor for the Ariane program, both financed by the European Space Agency (ESA)

Emerging Space Start-ups in Italy: Innovators on the Rise

Italy has a number of innovative and successful start-ups that develop and provide various products and services for the space sector. Here are some of the Italian promising space start-ups:

• D-orbit (funding €21.3M) - Provider of in-space transportation solutions. It provides solutions, such as space transportation and advanced in-orbit services. It also provides services for the precise deployment of a full constellation of satellites with its free-flying dispensers, including solutions for CubeSats. Much higher funding obtained in 2022 in the form of convertible loans as a bridge to a big Series C round expected in 2023.

• Leaf Space (funding €42.4M) - Provider of ground station network solutions for small satellites. It provides users with ground segment-as-a-service solutions for satellite operators, offering fully managed, dedicated Ground Station as a Service solutions for operators of medium-large constellations.

• Sidereus Space Dynamics (funding €1.5M) is an Italian aerospace start-up founded in 2019 to revolutionize access to space. The company can already count on multiple awards won worldwide and the support of numerous players in the industry. Sidereus has developed and is currently testing EOS, a fully reusable orbital launch vehicle for small satellites and payloads. Commercial flights will start in 2023.

• AIKO Space (seed, funding €1.5М ) - a deep tech software company developing pioneering AI technology for the automation of space missions. scalable, up-to-date, and user-friendly products for the space industry that reduce the cost of space missions and allow people to get rid of repetitive tasks.

  We talked with Lorenzo Feruglio, Ph.D, Founder and CEO of AIKO Space:

“ As the CEO of an aerospace scale-up in Italy, I see the development of the Italian space ecosystem as fundamental in the global tech landscape. Italy has already committed to ambitious and strategic programs that will make Italian companies compete at a global level, I am sure it will commit even more in the future. Being a space founder in this dynamic environment is a source of pride and an opportunity to consolidate AIKO as one of the leading automation players for the space industry, worldwide.”

• Launch OLM (Pre-seed) - Italian aerospace company that provides dedicated commercial launch facilities that will seek to support the full development cycle of small to medium launchers - from their regulatory frameworks to the test beds, their payload integration all the way to the launch-pad, with centrally located infrastructures in southern Sardinia and Portugal. Testing, storage, fuel farming, and direct impacts with engaging STEM initiatives stimulating the industry where it matters: its promising future

We talked with Alberto de Iorio, the CEO of Launch OLM:

"Shifting focus from moonshot projects to operationally viable infrastructures will propel Europe's emerging launchers into the next era. The genie is out of the bottle, and what it needs is the means to test, iterate and launch on a daily basis by establishing not only strategically located facilities but also a regulatory ecosystem that Europe can spearhead, thus turning ambitions into reality - OLM wishes to sustain that.”

We would like to share with you a catalog of space companies operating in Italy, prepared by the Italian Space Agency.

Fueling Innovation: Italy Space VC ecosystem

Spacetech startups in Italy can apply to various VCs,  accelerators, and incubators that offer funding and support for their growth. Some of the options are:

• Primo Space (by Primo Ventures) is the first Italian venture capital fund, one of the few in the world, specializing in the space tech industry. The aim is to invest in those solutions constituting the space infrastructure, the ground applications enabled by space technologies, and those technologies enabling the space industry as a whole. Check out space investment topics. Primo focuses on seed and early-stage projects, and the investment can vary starting from smaller tickets in low-TRL startups up to 5 million euros in a single company. 

Take a look on our Spotlight with Raffaele Mauro – General partner at Primo Space.

• Star Tech Ventures (still in fundraising - target €100M, first closing will be announced soon), Star Tech Ventures launched an Italian early-stage fund - Pre-Seed, Seed, Series A, B/ from €100K to €15M, to invest in the most prominent startups within the Aerospace and Security industry, beyond the idea stage, with at least a development phase in progress, excluding pre-incorporation stages. The Italian and European space sector has an amazing startup ecosystem usually struggling to access capital and management expertise needed to accelerate growth. Hence by combining extensive originator partnerships, a hands-on approach, and an independent CVC strategy, STV aims to identify and actively nurture the growth of startups to generate significant value for both portfolio companies and investors on a global scale.

• CDP Venture Capital - The Fund aims to make Venture Capital a strategic pillar to Italy's economic growth and innovation, creating the conditions for a comprehensive and sustainable growth of the Italian Venture Capital ecosystem.  Fund has an Agreement with the Department for Digital Transformation of Italy to create an Italian Space Venture with over 250 million euros to support innovation in the space and aerospace sector

• Galaxia - Focus on a proof-of-concept (prototyping) and seed stages, with a venture studio approach. 

• Deep Blue Ventures - Not only focus on Aerospace but it’s one of their target vertical, early stage but more oriented on startups with a clear product market fit.

There are a few Accelerators that could support your project in Italy:

• The ESA Business Incubation Centre (ESA BIC) in Turin, which started in late 2021, is run by I3P, the Innovative Companies Incubator of Politecnico di Torino. It receives technical support from Politecnico di Torino and LINKS Foundation and works closely with the European Space Agency (ESA) and the Italian Space Agency (ASI). This program offers support to startups, including potential grants of €50,000 without taking any ownership in the startup. You can find more information on their website. Recently it has been announced the launch of other (new) three ESA BICs in Italy (i.e. Padua, Milan, Brindisi)

• Plug&Play is a leading international venture capital fund and incubator specializing in innovation. This foundation runs over 100 industry-focused accelerator programs in over 50 location globally, and invest in over 250 companies in a year alongside the world’s best VCs. Plug&Play Turin division has a Takeoff Accelerator. It is a custom program that invests a pre-seed/seed ticket every year to eight to ten early-stage startups in the Aerospace and Advanced Hardware industry.

Turin is also a key global center for Aerospace and Advanced Hardware. It’s the main hub in Italy, fourth in Europe, and seventh largest in the World.

With an ecosystem of more than 160 aerospace companies and more than 12.300 workers, Turin is the ultimate city to pair the expertise of Aerospace tradition with top-notch agile upstream and downstream startups.

• Intesa Sanpaolo Innovation Centre is initiated by Intesa Sanpaolo Group, one of Italy's leading European banking groups. The center conducts research projects, analyzes trends, and supports startups and businesses based on open innovation and the circular economy. It also organizes matchmaking meetings with firms and investors, provides access to funding, and collaborates with international acceleration programs to support Italian startups. Intesa Sanpaolo Group assists businesses focused on aerospace, agrifood tech, bio-economy, industry 4.0, cleantech, fashion, tourism, MedTech, and smart mobility.

• Astropreneurs Space Startup Accelerator is turning space-related ideas into viable businesses and is promoting opportunities for entrepreneurs coming from the space and non-space sectors. The program is funded under the CASSINI ACCELERATOR program and co-funded by the European Commission.

• Quasar - Primo Space and G-nous just launched the first edition of Quasar, an open call dedicated to Italian startups operating in the space economy.

• Polispace is the first space association of Politecnico di Milano. Its main objective is to fill the gap between industry and academia in Italy. The strategy adopted is: to propose, endorse, and supervise students' space-related projects, spread the aerospace culture with a global perspective, and provide students with internship and job opportunities through a network of companies.

• Leonardo Business Innovation Factory - The acceleration program of the second edition of the Business Innovation Factory (BIF), Leonardo's call for startups focused on the Simulation & Gamification and Cyber Security & Networking verticals, has begun. 

• PoliHub -  looking for new deep tech projects, and support startups through targeted technology management strategies, incubation paths, and acceleration programs

We talked with Anilkumar Dave, one of Star Tech Ventures’s partners.  Here's what he shared with us:

“In the last months, rumors and official announcements have acknowledged Italy as a vibrant (and rising) cradle for risk-finance-for-Space initiatives. One Private Equity and at least three Venture Capital funds are expected to start operations by the end of the year. The upcoming  ESA Invitation to Tender to assign the ESA Technology Broker contract in Italy as well as the willingness to act multilaterally and bilaterally (i.e. Spade Founders programme) to support the growth of new ideas and their fundraising, are with no doubt extremely good signs.

Those efforts might vanish if there is no scale-up plan or linked initiatives to support startups financially, strategically, and from a commercial perspective.

Interesting the fact that the upcoming VC is attracting different market operators and collecting interest in Space from non-space industries (even not adjacent).

Weaknesses of the Italian VC/PE landscape are their size and the risk propension (not high) although we are talking about a capital-intensive sector (upstream) and lower returns are expected to hit the downstream sector. “

There's a common perception that only major powers like the USA, China, and the EU have the capacity for significant achievements in space exploration. However, Italy's accomplishments contradict this notion. Italy has demonstrated that remarkable feats in space are possible for any nation. Our potential in this field is limited only by our creativity and determination. We hope this article encourages you to take action, regardless of where you reside. If you're interested in contributing to the progress of space exploration in your own country, don't hesitate to reach out to us at hello@spaceambition.org. We're open to discussing how we can assist your endeavors.