Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
💎 Reveal Undervalued Stocks Hiding in Any Market Get Started
Space startups funding halved in 2022 as investors shift to safer bets
By Akash Sriram and Shreyaa Narayanan
(Reuters) - Investments in space startups more than halved to $21.9 billion in 2022 as their venture-capital backers sought safer avenues in the face of a grim economic outlook, VC firm Space Capital said, adding that it expects more pain for the sector this year.
Last year, which saw a sharp reversal from a record 2021 with $45.7 billion in funding, marked the toughest period for space startups since the economic crisis in 2008.
"As the economy recovered from the COVID pandemic, central banks unleashed the fastest rate hike cycle since 1988. Market momentum hit the brakes and asset prices fell across the board," Space Capital said in its quarterly report.
The difficult environment has prompted leading space companies to prioritize proven business models, revenue and government contracts, the report added.
"Companies that serve U.S. government and defense needs are best positioned to maintain growth and profitability over the next year," Managing Partner Chad Anderson told Reuters.
Lately, satellite-based analytics, imagery and data companies have come under the limelight, especially after Russia's invasion of Ukraine and Sino-U.S. geopolitical tensions. For instance, private equity firm Advent International in December acquired satellite-imaging firm Maxar Technologies (NYSE:MAXR) for $4 billion.
Private companies in the segment have also benefited, attracting total investments of $2.5 billion in the fourth quarter - nearly half the figure for the entire industry.
Startups developing hardware for space, however, have not been so lucky, as their capital-intensive business models discouraged investors, analysts said.
Still, such startups that are exposed to government contracts are seen as more resilient because they have access to a steady stream of income in the tough environment.
"There has been greater investor interest surrounding anything associated with government smallsat manufacturing, as it is generally viewed that the defense budget should be more recession-resilient," Canaccord Genuity analyst Austin Moeller said.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.