Although space remains a magical place for most of us, it’s ultimately just another place for doing business. Today, the space economy is worth $420 billion, with commercial space revenue representing 79 percent of total space activities. If the space economy is nearly a half trillion-dollar business, how much bigger will it get? Bank of America says the commercial space market will hit $1.4 trillion by 2030. Why is the space economy growing so rapidly?
First, the new space economy is decentralized, entrepreneurial, accessible, and diversified — it includes players across industries. Second, we are witnessing an explosion in the volume of technologies being launched into orbit. For example, the number of satellites will reach 57,000 by 2030, and this is 10 times more than what we have today. This is important because satellites will enable faster products and services and open doors for more commercial opportunities. Third, space tourism, which will be worth $23 billion, will create new experiences and the opportunity for us to support those experiences with our assets and capabilities.
In 2020 alone, private investment in space companies set a new annual record of $8.9 billion, according to Monday’s report by New York-based capital venture firm Space Capital. What is and who is winning the space race today?
What is the Space Race?
The space race has been going on for decades, often quietly, with the presumption of international cooperation. But business is always at the heart of progress. Many humans don’t like to move unless there’s something in it for them.
In the case of government organizations like NASA, the space race gives people pause. Should we spend tax dollars on space travel when poverty still exists? Or is space travel the way to literally launch humankind out of poverty? No one knows for sure. But private companies entered the fray to make the question meaningless.
A New Dawn for the Space Race
Now there’s a new space race. Private enterprises like SpaceX have ditched the old rule book and set new timelines for what it means to travel to space. Read on to learn how SpaceX is investing in humankind’s interstellar future and what it means for the rest of us.
For those younger than 70, the space race was a period of furious technological competition between the United States and Russia, starting when Russia launched Sputnik in 1957. This culminated with the moon landing and a well-earned space handshake in 1975.
In 2021, the race is on — not for national dominance but for technological advancement. Five companies play major roles in defining what “space race” means in this decade and beyond: SpaceX, Virgin Galactic, Blue Origin, Starlink, and Relativity Space. However, it is not just billionaires who are in the game; entrepreneurs worldwide can also get funding if they come up with a creative and innovative idea. For example, Rocket Lab is a New Zealand start-up that received $140 million in funding to develop faster and low-cost payload deployment. And New Zealand does not even have a space policy.
Interstellar Investments
In 2018, the space industry was valued at US $360 billion and projected to grow at a compound annual growth rate (CAGR) of 5.6 percent, to value $558 billion by 2026. Commercial revenue in the space industry reached $336.89 billion, signaling growing business activity.
Market size estimates for 2020 are as follows:
● Space equipment market: Estimated at $369 billion in 2020
● Space propulsion market: Estimated at $6.7 billion in 2020
● Global in-space manufacturing, servicing, and transportation market: Estimated at $1.54 billion in 2020
Contact us if you want to learn more about market growth opportunities and the drivers of growth. We have created forecasting projections of commercial opportunities and insights into the technologies used in space exploration.
Essentially, to spur a viable investment, you need a scalable business model and technology, as well as a game plan and a new angle. The new approach that private companies use to make space travel such an investment involves one concept: reusability.
In the past, fuel tanks and boosters large enough to get a craft into space needed to be discarded once they got there. This means the investment in space travel had to be its own reward — the crafts and materials themselves could never be reused.
Technology (and ingenuity) has now advanced to the point where private companies seek a reusable rocket design. The new models can launch vertically, achieve orbit, refuel by satellite, land on another planet, and be reused. This ambition validates the space travel investment.
The founders of SpaceX, Virgin Galactic, Blue Origin, Starlink, and Relativity Space (Elon Musk, Jeff Bezos, and Richard Branson) share a passion for their investors. They hope to achieve commercial viability from different angles — Blue Origin focuses on tourism, whereas SpaceX hopes to colonize Mars by the 2050s.
These companies invest in new robotics research and testing in a race to achieve their goals. This, in itself, makes the new space race different — the umbrella concept of viable commercial space travel contains the three companies’ somewhat separate missions. They could all conceivably hit their targets and “win” the space race for their investors without stopping the others.
Read on to learn how investors can contribute to the space race and how each of the major private companies contributes to the industry to win its investments.
The Future of Space Funding
Most space start-ups in the United States and Europe are being funded privately, with venture capital accounting for nearly 50 percent of all funds. The United States is dominating the race for space innovation, with nearly 84 percent of all funding volume going to US companies. The outlook for 2021 looks bright as well, with several pending launches likely to get underway as soon as pandemic restrictions ease and logistics challenges wane, resulting in CAGR estimates of ~5 percent and more.
SpaceFund, a venture capital firm, represents vested interests in the new space race. It uses the insight of its expert technologists to guide investors toward a diverse portfolio of start-up space programs.
The new ecosystem of space technology requires firm expertise designed specifically to navigate the new technologies and investment opportunities of this industry. SpaceFund conducts its own research to gauge market opportunities in the field. It invests in high-growth start-ups so its investors have ground-floor opportunities in this tech revolution.
SpaceFund created the “SpaceFund Reality Rating” to give its customers, investors, and the industry media the ability to easily assess the start-ups and research facilities in space technology. SpaceFund defies the hype of new technology — it puts in the research to guide investors to the companies that show real promise in this growing, multibillion-dollar industry.
Here’s how the five biggest companies in the industry are investing in the burgeoning space race.
SpaceX
SpaceX’s Starship program strives for reusability in space technology. Its rocket has been designed to take off vertically and refuel in orbit. Using its working design, SpaceX hopes to colonize Mars by 2050, bringing commercial businesses with it. It motivates its investors with this ambition to settle on another planet.
Virgin Galactic
Virgin Galactic’s mission is laser-targeted to the customer experience. It and its Spaceship Company focus on the ambition of bringing space travel to everyone. Like SpaceX, it focuses on reusable technology. It enables its investors to access new space infrastructure, optioning advanced technologies to entrepreneurs ready to take the next step and contribute to the race.
Starlink
Starlink refers to internet coverage SpaceX is providing, currently in beta. As satellites, stations, and networking facilities go up, Starlink rises as a viable alternative to the traditional internet. It sends its satellites 60 times closer to Earth to provide a new experience. Preorders for the first Starlink starter kits have already gone live at the time of writing.
Relativity Space
Relativity Space boasts that its factories build rockets 10 times faster and with 100 times fewer parts than conventional methods. It entices investors with 100 percent domestic space technology in its engineering and manufacturing. It embraces new technology to stay ahead of the curve. Its payload launch vehicle, Terran 1, is entirely 3D printed.
Blue Origin
Blue Origin focuses on growth and lowering the cost of access to space travel. Its next-gen launch vehicles emphasize its reusable engines. It has yet to launch human crews, but its New Shepard currently ships payloads into space. As its costs decrease, Blue Origin stands to provide its investors with a bright future as we move further into the 2020s.
The Takeaway
The modern space race is not a fight for dominance but commercial viability. It’s about introducing the world economy to the possibility of space industries, including tourism, food, travel, and even entertainment. It must begin as a financially viable technology, which in this case means reusable.
However, once we’ve achieved a basic rhythm with our technology that allows for reusable vehicles, we can start making return trips, transporting supplies, and building. That’s when private enterprise will really make its mark on space travel, and all the investors will start rejoicing. Space McDonald’s won’t take long to build after that! For better or worse.
To learn more about our Space Billions Report, investment opportunities, and how AI and blockchain are used in the space market, reach us at [email protected]
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Written by:
Ina Wanca
Jarrell Chalmers
