Generation Space Tracks ‘Cautious’ Return to Growth for Investment in Q2
Earth’s horizon captured from the International Space Station above Western Australia on the coast of Shark Bay. Photo: NASA
The second quarter 2023 report from Generation Space by Seraphim found a “cautious return” to space investment after a decline in the second half of last year.
Generation Space reported $1.2 billion was invested in space in the second quarter of this year, compared to $1.4 billion in the first quarter. It tracked 300 deals in the quarter, compared to 281 in the first quarter of 2023. Astranis closed the largest round in Q2 at $200 million.
“After a tough funding environment in H2 2022, companies and investors alike are returning to the market, conducting new Spacetech deals, albeit with round sizes and valuations that are in some cases flat/lower than during the investment boom of 2021,” the Generation Space report released this week said.
There are a few areas generating increased investor interest – businesses using space data for climate monitoring, companies focused on space data for financial products, and “beyond Earth” companies targeting space infrastructure. Before 2020, investment in “beyond Earth” companies was a minimal target of capital allocation but so far in 2023, it is the single largest area of investment, the report says.
For example, Constanellis Aerospace, which is targeting a Moon mission; Sierra Space, which is involved with commercial space stations; and GITAI targeting in-space robotics, all raised rounds in Q2.
“It is believed that many growth stage companies, adequately funded through 2021, refrained from raising capital during the uncertain economy of 2022. The beginning of 2023 has seen an uptick in growth rounds, likely out of necessity as runways shorten,” the report says.
In addition, the report will start tracking M&A activity as younger companies are making acquisitions. Generation Space highlights deals from Anduril, Firefly, York Space Systems, and Satlantis in the quarter.
Correction: A previous version of this story misspelled Constanellis Aerospace