Global investments in space startups surged by 31% in the fourth quarter, signaling a recovery bolstered by unprecedented launch activities and substantial government contracts.
The data, unveiled in a report by Space Capital on Tuesday, underscores a significant turnaround after a challenging two-year period marked by high interest rates and economic uncertainty.
According to the venture capital firm, funding in space companies reached an impressive $4.6 billion in the final quarter of 2023, propelling the total investment for the entire year to a noteworthy $17.9 billion. This resurgence hints at a promising outlook for 2024, as investors continue to inject billions of dollars into space startups.
2024 a promising year for Space Startups investments
“Despite a relatively slow start to the year, 2023 investment ultimately was in line with 2022. If the quarterly trajectory continues, 2024 should be a healthy year for investment in space,” affirmed Space Capital.
Last week, Italian space logistics startup D-Orbit celebrated a major milestone, securing over 100 million euros ($109.37 million) in a late-stage funding round led by Japan’s Marubeni. The funding infusion aims to facilitate the deployment of additional satellites and enhance services such as space debris clean-up.
The report from Space Capital reveals that an impressive $298 billion has been invested in 1,832 space companies since 2014, indicating sustained and growing interest in the sector.
The legacy space companies experienced strong surge in acquisitions last year, more than doubling the figures from 2022. This trend, identified by British investment firm Seraphim Space, highlights a strategic move by established players to strengthen in-house capabilities and competitively position themselves against emerging space companies.
“The prospect of declining interest rates is boosting equity valuations and improving LBO (leveraged buyout) math, making M&A more likely in 2024,” remarked Space Capital Managing Partner Chad Anderson.
As the space industry continues to rebound, the substantial investments and strategic moves in 2023 set the stage for a dynamic and promising year ahead, with 2024 poised to witness robust growth and innovation in the space startup sector.
