Oct 18, 2022 - Science
A space investment slump
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Illustration: Sarah Grillo/Axios
Investment in space industry startups fell off in the third quarter of this year, according to a report from Space Capital.
Why it matters: Startups push innovation in the space industry and their funding is an indicator of where the space economy might be heading.
- Last year, the global space economy was valued at about $370 billion. It's essential to national security, agriculture and many invisible parts of everyday life like GPS.
What's happening: The economic downturn appears to be hitting certain parts of the space industry hard, with venture capital investment falling off.
- $3.4 billion was invested into space startups in the third quarter of the year. Overall investment has fallen off by 47% year to date when compared to Q3 of last year, according to the report.
- Parts of the industry including launch, applications and distribution all saw declines or at least flat funding, according to the report.
Between the lines: Companies focused on far-future and more speculative space ventures like asteroid mining have seen a precipitous drop-off in investment since last year's record highs.
- In 2021, investors funneled $1.4 billion into these "emerging industries," accounting for nearly half of the total investment in this part of the space industry since 2013.
- Q3 of this year — with $206 million invested year to date — appears to mark a return to the more typical amounts of investment into emerging industries seen before last year.
- "We saw a lot of companies get funded that probably shouldn't have," Space Capital's Chad Anderson tells me. "I think that they're going to feel some pain when the rubber meets the road over the next 12 months when they realize that they need more capital, that it's harder to come by, and that no one is willing to pay those prices that they paid last year."
