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Private investment in ‘space economy’ launched – Record and risk

Aerospace technology companies, including SpaceX and Sierra Space, received about $ 15 billion from private investors in 2021, marking a record year for the emerging industry as investors continue to bet on the “space economy”.

In particular, private investment in space infrastructure companies jumped to $ 14.5 billion in 2021 from $ 9.8 billion in 2020, an increase of more than 50%, according to a report by the American company Space Capital.

The historically high investment on an annual basis is mainly due to the record amount of $ 4.3 billion raised in the fourth quarter of 2021 alone, in a series of mega financing rounds.

At the top were Sierra Space, which raised $ 1.4 billion in a round of financing, Elon Musk’s SpaceX $ 337 million and Planet Labs $ 250 million, which went public through SPAC last December.

According to the report of Space Capital, since 2021, a total of $ 252.9 billion worth of global equity investments have been made in 1,694 space technology companies.

“Looking ahead, there are huge opportunities to expand the adoption of existing infrastructure as we seek radical approaches to creating and managing space technology-based assets,” said Space Capital CEO Chad Anderson in the report.

The company says it is excited about SpaceX Starship, which is expected to enter space orbit by 2022, which will not only usher in a “new phase of infrastructure development”, but will “completely change the way we operate in space”. “.

Although 2021 was a great year for the industry, Space Capital warns that the volatile market environment could have an impact on investment in aerospace technology. The recent wave of listed space technology companies, most of which are unprofitable, is expected to stagnate and companies are likely to see their shares negatively impacted by the forthcoming rate hike usually affecting the growth and technology industry. “Much of the momentum we saw in 2021 was overshadowed by careful ‘building’, which increases the risk for investors,” Anderson said. “Not all SPACs are the same,” he added.

“It is important for investors to realize that openings in the ‘space economy’ require specialized know-how,” the Space Capital report said. “We believe that this will become clearer in 2022, as overpriced companies will be stuck on Earth and quality ones will be launched.”

Read also:

* Elon Musk’s SpaceX exceeded $ 100 billion in valuation

Source: Forbes

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