Chairman & CEO, Voyager Space Holdings. Full bio available at www.dylantaylor.org.
getty
The space industry is undergoing rapid expansion. As private companies and startups transform the sector and spearhead innovation in space technologies, humans are closer to making deep space exploration a reality.
I believe experts are right to describe this "NewSpace" era as a "gold rush" in investments, especially with the help of space technologies and infrastructure that propels our progress to the stars. Several Wall Street firms, such as Morgan Stanley, concur that space will become a trillion-dollar economy by 2040 — an estimate that today’s investors are banking on.
Just as software underwent an investment renaissance in the 1990s, the NewSpace industry could provide lucrative opportunities, too. As costs decrease and more startups enter the arena, the barriers to investing decrease. Determining where the most promising investments lie is difficult in a burgeoning sector with complex categories that intersect with various other industries. However, as the CEO of a multinational space-holding firm, I've found the key to lucrative investments is to look at the infrastructure and technologies that foster the very foundations of space exploration:
Human Spaceflight And Rockets
Virgin Galactic became the first publicly traded space tourism company, debuting on the NYSE to much excitement. The moment was extremely significant for the space community, as the company was the third liquidity in the industry. From my perspective, Virgin Galactic signaled another invitation for investors to consider NewSpace and opened the door for more extensive, notable space opportunities.
Virgin Galactic’s two main competitors, SpaceX and Blue Origin, are also working on similar ventures. It doesn't seem to me that these competitors will go public any time soon; Blue Origin is focused on developing a rocket to launch space tourism, while SpaceX’s Starship rocket aims to travel to different ends of the Earth in low orbit. Virgin Galactic also solidified an investment from Boeing to mature its space tourism technology and build rockets capable of point-to-point high-speed travel, similar to SpaceX.
These developments are an important reminder that development cycles take longer in the space sector. But reduced costs and reusable rockets made by companies like SpaceX and Blue Origin may indicate to investors the importance of these technologies and the industry’s longevity.
Technologies that old school agencies such as Boeing have developed — like the $4.2 billion Starliner spacecraft that allows the U.S. an independent space tourism provider — are vital to building a robust and competitive sector.
Furthermore, I've seen some private companies that are also focusing on various human spaceflight opportunities ranging from research to space station habitats.
Space Satellites
Satellite services range from manufacturers to broadband providers. Increasingly, satellites have become a crucial part of space’s infrastructure, as they operate as the gateway to digital data. As Internet of Things devices and big data are increasingly adopted, I believe satellites could become an overlooked area ripe for further investment since they’re essential to space operations.
I've observed NewSpace players are entering the fray within satellite communications, thus offering more competition in the race to build extensive satellite constellations (or networks) of hundreds or thousands of small satellites to provide high-speed internet.
For example, SpaceX, OneWeb and Telesat are all launching satellites to form mega-constellations. (Full disclosure: OneWeb is a client of a company my business owns.) Amazon also revealed its Project Kuiper, a group of 3,236 orbiting satellites, which I believe signals to investors why they may want to consider these networks.
OneWeb is pursuing its own internet constellation, aiming to launch 650 satellites into orbit by 2022. The company has raised $1.4 billion in funding, with investments from a wide variety of sources. However, SpaceX’s Starlink is the most ambitious satellite project yet. The Starlink network plans to include up to 30,000 satellites when completed and offer more capacity per satellite, further bolstering more investment in innovation.
Imagery And Data Analysis
Although imagery and data analysis consists of the smallest category by total market value in the space investment portfolio, the past 10 years of privatization have fostered the tools that space explorers need to survive on long-term missions. I expect this niche will be the fastest to grow in the coming years.
Maxar Technologies, for instance, is one such company that operates what it claims is “the world’s most advanced constellation” of imaging satellites. It’s these geospatial imagery companies that I've seen some investors forecast having high investment potential. The emergence of the technology is compared to past technologies that were a gateway to explorative advancements.
Additionally, several private companies have focused on different applications within the imagery and data analytics field. For example, Spire Global operates a group of small satellites, while others collect data on the climate and take regular images of the Earth’s surface.
Future Returns
While some experts caution that some of NewSpace’s business models are unpredictable and that Virgin Galactic’s market shares are unstable due to unpredictability in the market, I believe the rate at which space technologies and infrastructure is developing proves a viable investment.
The past decade of private space investments has proved phenomenal. Despite expectations that space would be hit hard by the pandemic, 2020 still secured a record of $8.9 billion in investments and 24 exits for these types of space infrastructure and tech companies. If anything, companies must prove their business model works, but these space ventures have the power to boost financial markets and support our global economy. The value doesn’t lie; the gold rush in space investment is just getting started.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
