Illustrated by Sarah Grillo/Axios
Traditionally earthbound companies, industries and investors are looking to space as a place to do business, compete and invest.
Important reasons: Continued growth of the space economy depends on space companies proving their worth to non-space entities and moving beyond established industry partnerships and government commitments.
- McKinsey partner Jesse Klempner told Axios that the space economy “will grow from ordinary companies looking at ordinary ways to solve ordinary problems.”
- It may be happening now. McKinsey senior his partner Ryan Brukardt told his Axios:
what’s happening: According to Space Capital data, 2021 marked the highest level of investment in the space industry, with $14.5 billion raised through private investment.
- Despite a significant drop in investment last year, the space economy is still growing, reaching $424 billion in 2022, according to a Euroconsult report.
Outside investors and companies of the space industry are looking to space to add value to their companies.
- They build and use analytics products that integrate earth observation data and use space for communication tools such as tracking ships at sea.
- Harvard Business Review stressed the need for all companies to develop a “space strategy” late last year.
conspiracy: The way space companies market themselves to potential business partners and investors has also changed and evolved over the past decade.
- Instead of focusing on the number of satellites in orbit, companies can talk about how satellite-provided data and proprietary analytics can transform their businesses and sectors.
Line spacing: BryceTech’s Carissa Christensen also told Axios that the space industry is seen as a source of competition from ground companies in some areas.
- For example, Starlink, which covers the Internet worldwide, is a major competitor to telecommunications companies of all kinds.
- The manufacturing industry could also face competition from space companies focused on new ways to build rockets in the future.
Big picture: Entrepreneurial attention, driven by success stories like Elon Musk, Jeff Bezos and Richard Branson, has also sparked interest outside the space industry, Christensen said.
- “Seeing some of the most successful entrepreneurs of all time, such as Elon Musk, Jeff Bezos, and Richard Branson pursuing space deals, has made them more open to the flow of space deals. I’ve had VCs tell me that it’s going to happen,” adds Christensen.
- “The participation of very wealthy and very successful entrepreneurs and their companies justifies the sector.”
What to watch: Venture funding for space companies began to surge in 2015, according to Christensen, so that’s about the time funded space efforts start to prove viable or start failing.
- “Sometimes you make it, sometimes you die,” said Christensen.