TAMPA, Fla. — Space investments should start picking up in 2024 after plummeting last year, executives discussing the industry’s outlook said Jan. 17, but will likely remain far short of record highs.
According to recently released research from early-stage investor Space Capital, around $17.9 billion was invested in the global space economy in 2023, 25% less than in 2022 and a decade low against tough economic conditions.
This level of investment was a far cry from a $47 billion peak Space Capital recorded for 2021 as banking giants such as Morgan Stanley forecast a trillion-dollar space economy by 2040.
“A lot of it is just driven by macroeconomic factors like higher interest rates, which tend to reduce the risk appetite,” Hoyt Davidson, managing partner of investment banking and financial advisory firm Near Earth, said during a webinar hosted by the Space and Satellite Professionals International (SSPI) trade organization.
Historically, most space investments come from the United States, where Davidson said investors were buckling down for a recession that never came.
“I think people believe in general that inflation is getting tamed and interest rates are going to flatten or come down,” he added, “and so the appetite for risk investment should improve this year.”
However, investors are still reeling from a recent wave of special purpose acquisition company (SPAC) mergers that rushed a bunch of early-stage space firms to the stock exchange, only for many of them to miss revenue targets and significantly underperform on the public market.
“We had kind of a boom and bust cycle with the SPACs,” said Matt O’Connell, an operating partner at venture capital firm DCVC.
“I think that there were some companies that should not have gotten funded and that left a bad hangover,” O’Connell said, “and we’re still working through that.”
The market is in a “holding period right now,” he said, but…
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