$ 1.9 billion invested, led by SpaceX

Private space investments reached $ 1.9 billion in the first quarter, according to a report by New York-based firm Space Capital on Wednesday.

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

“In the early stages, we are seeing larger transaction sizes at higher valuations and lower terms as VCs harness the historical amounts of capital they raised in 2020,” he noted.

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

The first, infrastructure, contains what many people in space will consider, such as companies building rockets and satellites.

The other two categories are application and distribution. The former include space-dependent services, such as itineraries or navigation, while the latter represent ground-based technologies connected to space-based networks.

In total, Space Capital tracks 1480 companies with $ 186.7 billion in cumulative global equity investment since 2012 in its three categories.

The broad analysis of the space economy reflects Anderson’s underlying thesis, and he coined a phrase – which is increasingly repeated in the industry – to suggest: ‘In the same way that every company today is a technology company, every company of tomorrow will be a space company. “

Anderson believes it is very likely that the investment in space infrastructure will amount to more than $ 10 billion this year, which will reach the highest record of 2020 at $ 8.9 billion.

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

He noted that Jeff Bezos has so far not “poured any new cash into Blue Origin”, and “SpaceX by Elon Musk” will need additional capital as they are going to push their major initiatives, Starlink and Starship.

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

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

Space Capital is suspending eight space deals with SPACs, or specialty procurement companies, which are expected to close and ‘more exits are on the way’, the report said.

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

A SPAC or special acquisition company is a shell company that raises 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 access to additional capital that SPACs provide to infrastructure companies, but are wary 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 a business offers a service that goes beyond spinning rockets, ”Anderson said. He gave Rocket Lab, which merges with SPAC Vector Acquisition, as an example. Last year, the company expanded its business to spacecraft system services.

“We have seen SpaceX lead in this way again. They are a launch company at first, but the main driver of their valuation is their satellite communications services. [called Starlink]”And so many other things they do,” Anderson said.

The PIPEs, or private equity investments, of these SPACs will also increase total investment in the second quarter, which Anderson said will be ‘massive’.

He believes there are three companies that will most likely announce a merger of SPAC in the coming months, and he expects about a dozen space SPAC deals for the year in total.