Updated: Mar 16, 2022
By Roberto Alvarez, Venture Partner, Seldor Capital
Space was never so accessible, relevant and necessary as it is now. Foundational government investments in space over decades, the recent acceleration of technology growth across various domains, and the rise of a new class of global entrepreneurs have laid the foundations for a new space era.
There are plenty of reasons to invest in space technologies and ventures. Below, I offer my perspective on the matter and highlight three reasons.
The business opportunity
Space activities were traditionally known for being under the domain of governments and amounting staggering costs, with not enough funding to match expenses. One of the main transformations the industry has undergone recently results from a combination of breakthrough technologies developed by the private sector and business innovation as a way to lower the costs of space activities. This completely changed space economics - think about the amazing feat of making reusable rockets a reality, for instance.
The global space economy already generates between $300 and $350 billion in annual revenue and, according to Morgan Stanley, is expected to grow to more than $1 trillion by 2040. Thus, it is not surprising that the cumulative equity investment in space companies since 2012 equals to $200 billion. 2021 marked another record level of VC deal value in space tech: $7.66 billion, up from $5.22 billion in 2020 and $3.03 billion in 2019.
The trend toward investments in space will continue and even further accelerate in the years to come - the current geopolitical situation can be expected to trigger new investments from governments. Our analysis at Seldor Capital reveals several gaps to be fulfilled in the space economy, which will lead to novel opportunities ahead in areas such as launch, testing, in-space data storage and computation, manufacturing, inspection and maintenance, and more. From satellites, to launch services, space tourism, debris tracking, geospatial intelligence, Mars bases, and a variety of other drivers, it is safe to say that the business opportunities are galactic.
The transformational potential
Investments in space have an unparalleled transformational potential. Space projects push technology development forward and can change the way we live on Earth - actually, they have already done that. Take Project Apollo for instance: it catalyzed developments in microelectronics, new materials, computation and other technologies that are applied in the devices we currently use in our daily lives today - you would not be reading this post without such technologies. To have a glimpse on some of the technologies resulting from space activities, check this amazing NASA website.
Space projects not only generate new technologies, but they also reframe the way we think, and even elevate our ambitions as humanity. Thanks to the Project Apollo, we all know what a moonshot is: a long-term, ambitious, forward-looking initiative at the frontiers of technology that is able to achieve extreme goals and solve big problems, inspiring generations of innovators and entrepreneurs. Since Gagarin said "the Earth is blue", space programs and astronauts have been allowing us to gain a new perspective on our planet. We should acknowledge that space also holds the promising power of transforming how humanity sees and takes care of planet Earth in a sustainable manner. That goes from gaining an emotional perspective, like William Shatner recently did, to being better prepared to monitor Earth and manage the use of its resources. The latter is a task enabled by innovative startups such as Lunasonde, a Seldor Capital portfolio company.
Going forward, we will see investments in space having an increasing impact on Earth and humanity.
The dream - it's personal!
I was born in the very south of Brazil. I vividly remember going to the countryside with my family and spending long hours outdoors at night, talking and staring at the Southern Cone's sky. The moon, the stars, Venus, Mars, a few fast-passing satellites - they were always there, prompting innumerous questions and fueling my imagination. Growing up in the 1980s, Carl Sagan was also a frequent visitor, filling our living room with excitement and magic.
I have always been so incredibly fascinated with science and technology. Somewhere, that young boy who used to be awake until late hours to watch TV - Cosmos was aired at 11:15 pm on Sundays night in Brazil - and only go to bed after the show was over, not to sleep but to read the Cosmos book or something alike, still lives in me. I could not find a deeper and sweeter reason to invest in space technologies and ventures than this.
I invite you to keep an eye out for all the opportunities the space will bring and hope to see you in the journey. Ad Astra!