Galactic gold rush: private investments in space – new records

Galactic gold rush: private investments in space – new records


We will call it space race version 2.0.  It has been almost half a century since Apollo landed on the Moon. Today venturers once again are extending the frontiers of rocket and satellite technologies, and United States actively encourages this trend.

It resulted into a wave of innovations: from compact computers to devices that fit in your hand. And startups – from San Francisco to Sydney – are creating new baseball-sized vehicles for orbital research.

Since 2010 the industry has made a great leap in development, the number of companies has increased sixfold (up to 800) and volumes of space investment have reached $10 billion. This list is headed by SpaceX, a company owned by billionaire Elon Musk that got funding from Google Inc. and Fidelity Investments on 20 January, having hit the previous record: a day earlier satellite manufacturer Planet Labs Inc. announced about getting $95 million.    

Interest in the industry is fuelled by SpaceX’s rocket launches, space tourism from Virgin Galactic and attempts of Facebook Inc. and Google to provide Internet services worldwide with the help of small satellites, drones, air-balloons and lasers.

 A childhood dream


“There are many of us who grew up in the days of space race between the Soviet Union and the USA. And many of us dreamed about space. Now investors are spending lots of money on space research, and the number of business projects has significantly increased since SpaceX was founded,” says Steve Jurvetson, venture capitalist and SpaceX director.

Google has invested $10 billion in Space Exploration Technologies Corp., a company with 6 launches in 2014.

“SpaceX attracts investors because it constantly shows that it can meet expectations,” says Scott Nolan, former employee of SpaceX, now a partner of Founders Fund, venture capital company, which was founded earlier by Peter Thiel, cofounder of PayPal Inc.

“Weekly basis”

Planet-Labs-Weekly -basis

Breakthroughs take place on a weekly basis starting from palm-sized satellites and ending with usage of 3D technologies in space. “There are two hot strivings: small satellites capable of streaming data or images and vehicles to get them cheaply into orbit,” says Dick «Rocket» David, CEO of New-York based NewSpace Global.

Planet Labs has received more than $160 million and launched 73 satellites. Such amounts seemed to be unbelievable three years ago, when Will Marshall built the first miniature satellite called “doves” in Silicon Valley.     

“A lot of people were quite skeptical concerning this idea and found it to be absurd. But we have facilities in orbit and customers who are interested in such data. Every time when we make a photo from space, we can see how the world is changing,” says Marshall.

Space risks


Investing in new space start-ups is still a gamble. When California-based Mountain View paid $500 million for Skybox Imaging, it had launched only one small satellite.

“We counted on the low cost of satellite, and not on technologies, in order to make data available for commercial use. There is no proof yet that such approach will be successful,” noted John Roth, vice-president of business development at the space department of Sierra Nevada Corp.

Space exploration goes hand-in-hand with catastrophic mistakes. In October a rocket company Orbital Sciences Corp. planned to place into orbit 26 satellites from Planet Labs, but all of them were destroyed due to explosion. “Space is cruel,” wrote Marshall in a bog post at the time. “Planet Labs understands the risks of launch.”

Rise of NASA


NASA supported the development of aerospace industry by closing down Shuttle program in 2011 and giving green light to American companies. SpaceX is one of the largest beneficiaries, having contracts for a total of $4.2 billion for shipping equipment and personnel to the International Space Station.

Musk is using near-Earth flights to prepare for more ambitious projects: interplanetary travel and starting a settlement on Mars.

Other start-ups concentrate on smaller goals.

Accion Systems Inc., founded last year by two students of Massachusetts Institute of Technology, got $2 million from Peter Thiel’s fund for development of penny-size propulsion systems. Spire, based in San Francisco, raised $25 million in 2014 and plans to launch 20 microsatellites, equipped with sensors for tracking weather on Earth.

Following the Internet

Galacticgold-ush-private-investments-in-space-new records-1

“Space is going through what the Internet went through in 1990,” says Stephen Messer, an Internet entrepreneur and Spire’s first investor. What was earlier financed by government is financed privately now. Nevertheless the market remains huge; weather alone is a multibillion dollar industry.”

Venture capitalist, founder of New-York based I2BF Global Ventures, Ilya Golubovich is one among those who wants to collaborate with new companies willing to receive data with the help of so-called nanosatellites.

According to Ilya Golubovich investors can be sure to get their funds returned in 3-5 years.

“We are living in an amazing world, in the times of the first Moon landing and launch of Sputnik-1,” says Golubovich. “The value of development of this sector is inestimable.”