The Space Industry today: beyond headlines
Did you know there are over 1,700 private companies today working on groundbreaking solutions to propel the sector's growth?
SpaceX, Blue Origin, and Virgin Galactic have dominated SpaceTech’s media coverage for the past couple of years, achieving astonishing milestones. The attention has certainly increased awareness and been a huge positive for the industry overall, yet it has created a perception that the sector’s development is driven only by these behemoths. However, there are actually over 1,700 other private SpaceTech companies developing crucial technologies, and they tend to be overlooked even though there are at least 10 unicorns. Let’s try to understand why there are so many startups today in the space industry.
Industry in numbers
Half a century ago, we had only two major space agencies - and there was no love lost between them; the USA and USSR were engaged in the Space Race - a heated contest to achieve superior spaceflight capabilities. Nowadays, there are over 70 national space agencies, including the ones of developing countries, pursuing collaborations and setting up joint programmes. The agencies’ combined estimated annual budget has reached a staggering USD 60B.
At the same time, private investments have reached USD 45B in roughly 650 Space startups in 2021 alone. To put this in perspective, crypto companies raised approximately USD 30B in funding during the same period, albeit garnering much more attention. The majority of these investments are in the US, but the distribution is becoming more and more global.
Why is the Space industry flooded with startups today?
First, everything in space requires electronics which used to be fully custom-made and hence very expensive. Today, electronics for Space can be built from commoditised components which opens doors for new business models, and a lot of startups are pursuing them. Thanks to a Bulgarian startup, EnduroSat, buying an onboard computer is as simple as purchasing a laptop on Amazon and would cost roughly the same.
Second, it’s become significantly cheaper to send payloads to orbit with SpaceX’s reusable rockets. It costs only USD 1,500 per kg today compared to USD 147,000 in 1981 (adjusted for inflation). Therefore, companies can launch their own satellites or equipment for various space projects without considerable upfront costs.
Third, new 3D printing technologies, IT and robotics have improved all operational processes and reduced variable costs. For example, New Zealand’s Rocket Lab uses 3D printing to manufacture rocket engines; the company reports that it has successfully launched more than 150 satellites to date.
Finally, governments are enacting necessary laws and regulatory frameworks to support R&D and commercial projects. For instance, Luxembourg has one of the most progressive frameworks that helps the government attract SpaceTech companies and investors.
Do you want to know what these 1700 startups are doing in Space? We will cover it in one of our upcoming newsletters. Sign up for our newsletter to stay tuned.
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Wow, I didn’t know that SpaceTech is so huge! Thanks for the article.
Seeing all the startups is amazing. Not all will succeed but seeing the drive and ambitions from all these companies are inspiring me to be hopeful of the future!