Billionaire space race leads to record funding for space-tech start-ups

Space-related technology is a $200bn market that spans products and services for use on Earth, in orbit or for space exploration

A model of a Virgin Galactic spacecraft. Richard Branson completed a suborbital test flight aboard Virgin Galactic Holdings' 'VSS Unity' last week. Reuters

Billionaire space entrepreneurs like Jeff Bezos, Richard Branson and Elon Musk have raised the public profile and plausibility of commercial space travel in recent years. The hype has helped fuel a wave of funding into start-ups building the infrastructure to bring the new space race from science fiction to reality.

Space-related technology is a $200-billion market that spans companies building products and services to use on Earth, in orbit or for space exploration and colonisation missions. Venture capital investment in such companies reached a record $5.5bn in 2020, according to market research firm PitchBook. The industry is on pace to top that milestone with $3.6bn raised across 94 deals in the first six months of this year.

Last week Mr Branson completed a suborbital test flight aboard Virgin Galactic Holdings' VSS Unity and Mr Bezos is making his own journey to space on Tuesday, on a rocket made by his company Blue Origin. Marketing stunt or not, the increased attention around the industry has helped spur innovation and a surge of capital for companies looking to lay the foundation for space infrastructure.

“The rising tide lifts all boats,” said Daniel Ceperley, co-founder and chief executive of LeoLabs, a company that provides radar tracking services for objects in low Earth orbit.

The majority of capital has historically been funnelled to companies focused on technology to use on Earth, including satellite communications and imagery, Earth monitoring and geospatial analytics. However, increasing ambitions to explore past our home planet are fuelling what is expected to be a vibrant “space-for-space economy,” PitchBook analyst Ryan Vaswani wrote in a recent report.

The new interest could benefit companies like LeoLabs, which has radar sites in Alaska, Texas, New Zealand and Costa Rica that track objects in orbit from satellites to tiny debris, helping to prevent collisions. The start-up raised $65 million in funding in June led by Insight Partners and Velvet Sea Ventures.