$ 1.9 billion invested, led by SpaceX

Private investment in space companies reached $ 1.9 billion in the first quarter, according to a report Wednesday by Space Capital in New York.

“The trend toward larger late-stage transactions continued in the first quarter, with the first 10 rounds accounting for 77% of total investment,” Space Space managing partner Chad Anderson wrote in the report.

“In the early stages, we see larger transaction sizes at higher valuations and weaker terms as VCs push to implement the historic amounts of capital they raised in 2020,” he said.

The Space Capital quarterly report divides industry investment into three technology categories.

The first, infrastructure, includes what many would consider space companies, such as rocket and satellite companies.

The other two categories are application and distribution. The former includes space-dependent services, such as navigation or navigation, while the latter are terrestrial technologies that connect to space networks.

In total, Space Capital targets 1,480 companies with a cumulative global investment of $ 186.7 billion in 2012 in its three categories.

The comprehensive analysis of space economics reflects Anderson’s basic thesis, and a phrase – increasingly repeated in the industry – was coined to represent it: “In the same way that every company today is a company of technology, every company of tomorrow will be a company space. “

Anderson believes it is “very likely” that investment in space infrastructure will exceed $ 10 billion this year, which would surpass the 2020 record of $ 8.9 billion.

OneWeb, Amazon and Telesat’s broadband satellite communications efforts are expected to raise additional capital “for the rest of this year,” Anderson said.

He noted that Jeff Bezos has not “put any new money into Blue Origin so far,” and “SpaceX will need additional capital for Elon Musk as it continues to promote its major initiatives, Starlink and Starship.”

Anderson also said that investments in satellite companies, which account for about half of the space infrastructure trading activity since 2012, directly affect the application layer of the companies that Space Capital pursues.

“All the data comes from the satellites that drive these 150 billion dollars [total equity investment since 2012] in applications, “Anderson said.

Space Capital is pursuing eight space transactions with SPACs or special purpose procurement companies, which are expected to close and “more exits are on the way,” the report said.

Seven of these companies are in the space infrastructure segment, and in total, closing the SPACs will add nearly $ 3 billion in cash to the company’s balance sheets.

A SPAC or special purpose procurement company is a shell company that collects money from investors through an initial public offering and then uses the capital to buy a private company and make it public, usually within two years. .

“We welcome the access to additional capital provided by SPAC for infrastructure companies, but we are cautious that growth assessments and targets may be available to companies that do not have a comparable data angle,” Space Capital said.

A visible data angle means a company offers a service beyond launching rockets into orbit, Anderson said. He gave Rocket Lab, which merges with SPAC Vector Acquisition, as an example. Last year, the company expanded its business into spacecraft system services.

“I saw SpaceX driving like this again. They are a start-up business first, but the main evaluation factor is their business with satellite communications services. [called Starlink], and so many other things I do, “Anderson said.

The PIPEs, or private investment in public capital, of these SPACs will also increase total investment in the second quarter, which Anderson says “will be massive.”

He believes there are three companies “very likely” to announce SPAC mergers in the coming months and expects about a dozen SPAC space deals in total for that year.