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The Future of Investing in the Space Economy

By Sami Yaghma, Sep 19, 2023

Astronaut exploring a vast, rocky Mars-like terrain under a hazy sky, illustrating space exploration and extraterrestrial landscapes.

Space, the final frontier, has long captivated humanity’s imagination. Once only accessible to superpowers with vast resources, technological advancements have democratized space exploration. As the industry shifts from governmental dominance to private enterprise, vast investment opportunities are emerging.

Historical Context

The 20th century witnessed a fervent space race between the U.S. and the Soviet Union. Landing on the moon was not just a testament to human achievement but also a geopolitical statement. Fast forward to today, the motivations have diversified: from scientific curiosity, commercial profitability, to ensuring the long-term survival of humanity.

Redefining the Space Economy’s Landscape

Rise of Reusable Rockets 

Historically, the exorbitant costs associated with single-use rockets hindered frequent space expeditions. SpaceX’s foray into reusable rocket technology has not only drastically reduced costs but set an industry benchmark, pushing other companies to adopt similar technologies.

Miniaturization and Tech Advancements

Planet Labs and similar companies have transformed satellite technology, proving that smaller can sometimes be better. This miniaturization has resulted in reduced launch costs and increased deployment frequency.

The Private Sector’s Embrace

It’s not just about SpaceX or Blue Origin. A multitude of startups and established corporations (like Axiom Space) are setting their sights on space, each bringing innovations that promise to redefine the space industry.

Data: The New Gold Rush

In the contemporary era, data drives decisions. Satellites, essential to our digital lives, serve as the backbone for various sectors, from meteorology to global communication.

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Potential Investment Sectors

Space Data-as-a-Service: The integration of AI with satellite data is unlocking unparalleled potentials. Industries worldwide now rely on real-time data for decisions, transforming everything from agriculture to urban planning.

In-Space Manufacturing: Microgravity offers unique conditions. Made In Space, a pioneering company, is already 3D printing fiber optics aboard the International Space Station (ISS), leveraging these unique conditions.

The Dream of Space Tourism: Visionaries like Richard Branson and Elon Musk are turning science fiction into reality, ushering in an era where space tourism could become commonplace.

Asteroid Mining: The concept of mining celestial bodies, once a mere fantasy, is now becoming plausible. The potential of harvesting asteroids for precious metals could redefine Earth’s economy and resource availability.

Space Colonization: Beyond tourism, there’s an ambitious vision to establish human colonies on Mars and beyond. While still in conceptual stages, the potential for growth and investment is astronomical.

Lunar Exploration and Economy: The moon, our closest celestial neighbor, is brimming with opportunities. Whether it’s establishing research bases, tourism, or mining for rare minerals, the moon is set to play a pivotal role in our space economy.

Space-Based Solar Power: Imagine harnessing the sun’s energy directly from space and transmitting it to Earth. The concept, though challenging, could revolutionize our energy sectors.

New Economics Reshaping Space

Space is not just a vast expanse anymore; it’s becoming an economic arena. The blend of technology, entrepreneurship, and a touch of audacity has fundamentally shifted the business dynamics.

  • Lower Barriers to Launch: Traditional space missions involved single-use rockets that made voyages expensive. The brainchild of Elon Musk, SpaceX, altered this narrative, proving that rockets can be reusable. The Falcon 9’s ability to land back after launching its payload is nothing short of a technological marvel. But what does this mean economically? Cost-effectiveness. With reduced launch costs, more players can now participate in the space economy.
  • The Advent of Miniaturized Satellites: Gone are the days when satellites were enormous, costly devices. The modern CubeSat, a small satellite for space research, has democratized space exploration. These miniaturized satellites, often combined in large numbers, provide services ranging from Earth observation to advanced communication solutions at a fraction of the previous costs.
  • Private Sector’s Euphoria: With potential high returns on investment, venture capitalists and private equity firms are showing a keen interest. The space industry, with nearly 1,800 active companies, has attracted over $273 billion in private investment. This influx of capital is accelerating innovation and commercial viability.
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Mega-Constellations and Connectivity

The dream of global, uninterrupted internet is becoming a reality with the advent of satellite mega-constellations. Leaders in this segment, like SpaceX’s Starlink, aim to envelop our planet in a net of interconnected satellites. With over 4,519 satellites already in orbit and plans for many more, Starlink seeks to redefine global connectivity. Competitors like OneWeb (648) and Amazon’s Project Kuiper (3,236) share similar aspirations. The potential? A paradigm shift in global data transfer and communication dynamics. These satellite constellations, once fully operational, might even challenge traditional fiber optics, creating a truly connected world.

Spotlight: Axiom Space

In the constellation of space companies, Axiom Space shines with unique brilliance. Its vision is not just to explore space but to commercialize it. Having recently raised $350 million (Series C), it plans to attach commercial modules to the International Space Station by 2024, Axiom is pioneering a new age of space habitation and research. By 2028, the company’s ambition soars higher, aiming to launch a fully private commercial space station. Axiom could potentially anchor the future space economy, drawing parallels to trailblazers in traditional finance sectors.


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Towards the Final Frontier

Investing in space is unfolding as a lucrative domain, with reusable rockets, satellite broadband, space tourism, and on-orbit services leading the charge. Yet, risks abound, from technical challenges and market uncertainties to geopolitical tensions and regulatory dilemmas. For investors, the realm of space offers both risks and unparalleled rewards. As the adage goes, ‘fortune favors the bold.’ And perhaps, in this century, it will favor those who look upwards, towards the stars. The next phase of the space economy awaits, promising prosperity, innovation, and a brighter future for humanity.

This material, provided by Linqto, is for informational purposes only and is not intended as investment advice or any form of professional guidance. Before making any investment decision, especially in the dynamic field of private markets, it is recommended that you seek advice from professional advisors. The information contained herein does not imply endorsement of any third parties or investment opportunities mentioned. Our market views and investment insights are subject to change and may not always reflect the most current developments. No assumption should be made regarding the profitability of any securities, sectors, or markets discussed. Past performance is not indicative of future results, and investing in private markets involves unique risks, including the potential for loss. Historical and hypothetical performance figures are provided to illustrate possible market behaviors and should not be relied upon as predictions of future performance.

FAQ’s

Why are companies interested in space now?

Several factors have ignited interest: technology has improved, launch costs have dropped, and there’s a growing demand for space-based services like high-speed internet from satellites. Plus, many see space as the next frontier for business opportunities.

Are there concerns about too many satellites in space?

Yes, as more satellites are launched, there are worries about space debris. This could lead to collisions in space if not managed properly. Efforts are being made to design satellites that can avoid collisions and safely de-orbit when their mission ends.

Can anyone invest in space companies?

Many space companies are private, but some have gone public or are part of larger public corporations. Interested investors can buy shares of these companies, though like any investment, there’s a risk involved.

Author

Sami Yaghma

Sami Yaghma

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