Private investment in space companies set a record last year, according to a report by New York-based firm Space Capital on Tuesday.
Space infrastructure companies received $14.5 billion in private investment in 2021, a new annual record that’s up more than 50% from 2020. That includes a record-breaking fourth quarter that brought in $4.3 billion or more from Sierra Space, Elon Musk’s SpaceX, and Planet Labs thanks to “megar rounds” of $250 million.
The quarterly Space Capital report breaks down industry investments into three technology categories: infrastructure, distribution and application. Infrastructure includes companies that are generally considered to be space companies, such as: B. Companies that build rockets and satellites.
Overall, Space Capital tracks 1,694 companies that have raised $252.9 billion in global equity investments across the three space categories since 2012.
“As we look ahead, we see tremendous opportunity to scale mass adoption of existing infrastructure as we seek radically new approaches to building and operating space-based facilities,” wrote Chad Anderson, Managing Partner of Space Capital, in the report.
The report also highlighted record investments from venture capital firms across the three categories. Space-related companies received $17.1 billion in venture capital last year, accounting for 3% of total global venture capital investment in 2022, according to the report1.
A warning about the changing market environment
Space Capital also highlighted the changing market environment for the spate of new space companies to go public, as rising interest rates hit tech and growth stocks hard – particularly companies where profitability is years away, as is the case for several space companies.
“Public markets started the year with a sell-off, and if it continues it may not be as easy for venture firms to raise record-breaking funds as it was last year,” Anderson wrote.
Anderson went on to warn that “not all SPACs are created equal,” saying that “much of the momentum we’ve seen in 2021 has come at the expense of great diligence, which increases risk for investors.”
“It is important that investors recognize that investing in the space economy requires specific expertise. We think this will become more evident in 2022 as some of these overvalued companies come back to earth and the quality companies move higher,” Anderson said.