Fast facts
- According to Space Capital, around $300 billion has been invested in space companies over the past decade.
- Analysts expect the industry to generate $1 trillion in annual revenue by 2040.
- TheStreet sat down with Chad Anderson, managing partner at Space Capital, who explained that investing in space isn't as high risk as people might think.
Perhaps the best example of this is SpaceX, led by Elon Musk, the private space industry has been growing recently.
In 2023 there were 223 rocket launch attempts worldwide, according to Space worksa 20% increase from 186 launches in 2022. In 2019, there were only 102 rocket launches.
SpaceX is leading that growth: The company launched 26 missions in 2020, 31 in 2021, 61 in 2022 and nearly 100 in 2023. Musk has said SpaceX expects to launch 144 times in 2024.
As the number of rockets aiming for orbit has increased, so have investments in the industry, as well as potential profits.
Related: Watch Elon Musk's SpaceX Starship Launch: Third Time's the Charm
Space Capital, a venture capital firm that invests in the space economy, recently noticed that almost $300 billion has been invested in some 2,000 different space-related companies over the last decade.
Citigroup Analysts said in 2022 who expect the space industry to reach $1 trillion in annual revenue by 2040, a forecast that was based on a reduction in the cost of launches.
Chad Anderson, managing partner at Space Capital, told TheStreet that space companies are about much more than rocket and satellite launches, calling space technologies the “invisible backbone that drives the modern global economy.”
According to Anderson, the idea that investing in space is a high-risk venture, due to both the expense required and the difficulty inherent in getting rockets into space, is “actually a very common misconception.”
Investing in space, he said, is not just about space stations, rocket launches and moon landings. This is transformative technology.
Related: Why Elon Musk Feels the Need to Guide Humanity to Mars and Beyond
The reality of investing in space
“Most people, when they think about space, think about the Apollo moon landings, the International Space Station and these great human achievements,” Anderson said. “They don't think about the entrepreneurs (who) are transforming almost every major industry here on Earth. That's the opportunity we're focused on at Space Capital.”
The space economy, he stated, is not limited to rockets and space stations; GPS, geospatial intelligence, and telecommunications drive the modern economy, and all three are supported by space-based orbital infrastructure.
Space Capital published a report in 2022 called “GPS guide,” which noted that “space technology has generated trillions of dollars in economic value and some of the highest risk returns the world has ever seen.”
This satellite technology has become the basis of entire industries (think Google Maps and all its competitors, plus Uber and Snap).
“The infrastructure is the satellites that are in orbit. The distribution is like Trimble and Garmin,” Anderson said, adding that Trimble marketing efforts – achieved in the early 1980s – made GPS signals “accessible to the technology community, which then came and built applications on top of it.”
“Now, that's how everyone gets around, orders their Uber, finds appointments, gets food delivered,” he said. “Everything we do is based on GPS.”
The space capital is invested in dozens of space-related companies including SpaceX, although not all companies in its portfolio are attempting to colonize Mars. Space Capital's portfolio includes exposure to the space infrastructure side (rockets, stations, satellites) as well as the distribution and application of that infrastructure.
Anderson acknowledged that there is a clear risk in rocket launches, especially for inexperienced companies, adding that “SpaceX makes the launch look easy, but it is not.”
“But if you only look at the infrastructure, you're looking at this category through a very narrow lens,” Anderson said, “and you're going to miss all the opportunities and all the value that's created from that infrastructure.” “.
Contact Ian with ai tips and stories by email, [email protected] or Signal at 732-804-1223.
Related: Tesla CEO Elon Musk's Environmental Dichotomy
