The Space Economy Ignition: How Venture Capital Investing in Early Stage Startups is Launching the Next Industrial Revolution
No longer considered merely a distant frontier, Space is being recognized as an additional new and major market - the Space Economy, thus fueling the increase in investment and the increase of Venture Capital being allocated into very early stage companies working within the Space Marketplace. The development and evolution of this market has happened rapidly, as we continue to witness ongoing growth in this sector through the creation and establishment of completely new Industries, which are currently changing how we live on Earth and beyond.
At Evolve Venture Capital, we have experienced this incredible momentum and growth first hand. One of our latest investments is a Company designing, fabricating and building materials in microgravity. This investment validates and confirms that microgravity Production is a commercially viable product category, presently the key interest of Venture Capital Investors in the Space Economy Industry. The Company’s materials manufactured while in microgravity possess unique characteristics, allowing for unique properties to be used in products such as Semiconductor processing, Pharmaceutical Ingredients and Optical fibre materials. The Business case is compelling - materials manufactured in Space can demand 100x higher prices than average Earth manufactured products based on their unique properties.
The Launch Cost Revolution
A major factor spurring on the growth of space economies is the rapid and drastic decline in the costs to launch into space (the 'launch price'). By providing venture capital investing in early-stage startups, venture capital has provided companies the capital needed to develop technologies related to reusable rocket launch systems. Because of this investment, companies have developed a technology that has cut the price per kilogram of launching a payload into space from $18,500 (Space Shuttle) to less than $1,000 today. Companies like SpaceX and Rocket Lab are pushing costs further down with additional technologies, and some industry experts expect prices could be as low as $100 per kilogram within 10 years.
The reduction in price has also made it easier for many new startup companies to develop business models that were once not possible due to high launch prices. Startups are now developing satellite systems (constellations) that provide real-time information to users for Academic research, Business communication, Earth Observation, etc., using microsatellites. One of our investments is a company that has developed a constellation of microsatellites that provide farmers with realtime data on the current situation affecting their crops so they can increase crop yields while using 30% less water. Thus, with venture capital investments in barrier-breaking startup companies, the cycle continues as lower prices create more demand for access to the space environment in turn, producing larger volumes of satellites launched and the technology developed to launch those satellites continues to drive cost savings through competition.
Space-Based Manufacturing and Materials
The manufacturing processes used in microgravity cannot be replicated anywhere else on Earth, and early-stage venture capital firms are financially supporting many companies that are exploring these new manufacturing opportunities. Companies are using the unique characteristics of space, such as zero gravity, perfect vacuum, extreme temperature fluctuations, to manufacture materials not available from Earth-based sources, including high-quality fiber optic cables, ultra-pure semiconductor crystals, and many revolutionary pharmaceutical compounds with improved therapeutic activity over traditional medicines.
A particularly exciting area of research and development is the potential for generating space-based solar power. Startups are developing systems for harvesting and transmitting solar energy to Earth using microwave transmission from space. The successful development of methods for capturing and directing large quantities of solar energy to Earth could provide an unlimited quantity of clean energy and lead to the complete elimination of fossil fuel use. At Evolve Venture Capital, we continue to monitor a number of companies working in the space-based solar energy market that could transform the global energy industry.
The Satellite Economy Explosion
Earth's Observation Satellites Create New Markets of Data; Venture Capital is Funding New Companies Using Satellite Imagery to Provide Useful Information for Agriculture, Insurance, Finance, and Urban Planning Through Analysis of Satellite Imagery. With Ongoing Revenue Streams Created from Subscription Business Models, New Startups Have More Predictable Revenue Streams Than Any Existing Traditional Space Companies Had Ever Experienced.
Synthetic Aperture Radar (SAR) Technology Allowed for Continuous Monitoring of Any Object, Day/Night, and Through Clouds. New Startups Continue to Utilize SAR Technology to Track Illegal Fishing, Supervise Construction Projects, and Forecast Natural Disasters; for Example, Our Investment in a SAR Analytics Firm Demonstrates this Technology's Capabilities. The Firm Provides Insurance Companies with Damage Assessments for Properties Damaged by Natural Disasters—Within Hours of the Event—Reducing the Average Time from Weeks to Days to Process Insurance Claims.
Space Resources and Mining
Asteroid mining, which was previously thought of as something that had yet to be fully developed, is now entering into a commercial opportunity. Venture capitalists are investing in early-stage companies that are beginning to break ground on technologies designed for asteroid mining; not just to mine for metals and rare earth elements, but also to extract water from near-Earth asteroids. The potential exists for one metallic asteroid to contain more platinum than all the platinum currently mined from the Earth combined, possibly leading to a trillion-dollar market.
The most important takeaway from asteroid mining is that the majority of resources will be used to develop and sustain infrastructure in space as opposed to being consumed here on Earth. The water extracted from asteroids could be converted into fuel for rockets and will provide places for resupply of rocket fuel through the solar system. This is the foundation for a "space-for-space" economy that supports exploration and development of Space with reduced reliance on Earth-based support resources.
The Orbital Infrastructure Build-Out
With the rise of space activities is increasing the need for the Infrastructure that will support these activities. Venture capital funding for early stage businesses has been used to fund companies that are building Space Tugs (vehicles designed to support satellite servicing & debris removal) as well as Space Infrastructure, including Orbital Refueling Stations (ORFs). These types of projects are the picks & shovels of the Space Gold Rush.
One of the businesses in our portfolio is focused on building Autonomous Satellite Servicing Vehicles (ASSVs) capable of extending satellite lives by 5-10 years via satellite refueling & maintenance, which significantly decreases total costs of satellite ownership by approximately 60%, creating an ongoing revenue stream that's not possible with the traditional "launch & abandon" approach.
Investing in the Final Economic Frontier
In 2030 (7 years), we will no longer be thinking about selling space exploration-based services, but rather practical solutions from space for our Earth-based customers. Therefore, the next generation of space start-ups will offer viable commercial products designed to address the Reasonable solutions to problems on Earth (as opposed to simply providing services intended to help expand humans into space).
As an early-stage venture capital investor focusing exclusively on the space economy, Evolve Venture Capital's investment thesis is focused on companies that connect the dots between space-based technologies and use cases in terrestrial markets. From satellite analytics to space-based communication networks to the future opportunities created via space-based unconventional manufacturing, our goal is to fund entrepreneurs who see the space economy as a mechanism through which to tackle humanity's greatest challenges—as opposed to being a destination for humans.
We continue to be committed to funding exceptional entrepreneurs who are working to create the infrastructure (both orbital and terrestrial) that will enable humanity to harvest the untapped economic value created by advancing humanity into the solar system. As we identify and support these transformational companies, we believe the impact of our investment on the future of humanity extends far beyond the economic value of our portfolio companies—it is a defining moment for humanity's future.
Contact Information:
Website: www.evolvevcap.com
Email: contact@evolvevcap.com
Phone: +65 8181 4097
