Invested $ 1.9 billion, led by SpaceX

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

“The trend towards bigger late-stage deals continued into the first quarter, with the top 10 rounds accounting for 77% of the total investment,” wrote Chad Anderson, managing partner at Space Capital.

“In the early stages, we are seeing bigger deals at higher valuations and looser terms as VCs aim to put in the historic amounts of capital they raised in 2020,” he noted.

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

The first, infrastructure, includes what many would think of as space companies, such as firms that build rockets and satellites.

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

In total, Space Capital tracks 1,480 companies with $ 186.7 billion in cumulative global equity investments since 2012 in three categories.

The broad analysis of the space economy reflects Anderson’s underlying thesis, and a phrase – which is increasingly repeated in the industry – he coined to represent it: to be. company.”

Anderson thinks it is “highly probable” that space infrastructure investment will exceed $ 10 billion this year, surpassing the record $ 8.9 billion in 2020.

The satellite broadband communications efforts of OneWeb, Amazon and Telesat are expected to “attract additional capital for the remainder of this year,” Anderson said.

He noted that Jeff Bezos “hasn’t put any new money into Blue Origin so far” and that Elon Musk’s “SpaceX will raise additional capital as they continue with their great initiatives, Starlink and Starship.”

Anderson also said that investments in satellite companies, which make up about half of the deal activity in space infrastructure since 2012, directly impact the application layer of companies that Space Capital tracks.

“It’s all the data coming from the satellites that power that $ 150 billion [total equity investment since 2012] in applications, ”said Anderson.

Space Capital is following eight space travel deals with SPACs, or special acquisition companies, that 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, the closure of the SPACs will add nearly $ 3 billion in cash to corporate balance sheets.

A SPAC or a special purpose acquisition company is a shell company that raises money from investors through an IPO and then uses the capital to purchase and disclose a private company, usually within two years.

“We welcome the access to additional capital that SPACs provide for infrastructure companies, but are cautious that valuations and growth targets may be out of reach for companies that do not have a defensible data angle,” said Space Capital.

A defensible data angle means that a company is offering a service beyond launching rockets into orbit, Anderson said. He gave Rocket Lab, which is merging with SPAC Vector Acquisition, as an example. Last year, the company expanded its operations to spacecraft systems.

“We’ve seen SpaceX once again lead in this way. They are a launch company first, but the main driver behind their valuation is their satellite communications services business. [called Starlink], and so many other things they do, “Anderson said.

The PIPEs, or private public equity investments, of these SPACs will also boost second quarter investment totals, which Anderson says will be “massive.”

He believes there are three companies that will be “very likely” to announce SPAC mergers in the coming months, and he expects a total of about a dozen Space-SPAC deals for the year.