Last year was the year for new space start-ups says Seraphim Space Index

Last year was the year for new space start-ups, according to the latest quarterly review of Global Private Investment from Seraphim Space Index.

While annual private SpaceTech investment is down 25 per cent compared to the record high of 2021, the year 2022 was still higher than all years before 2021.

And whereas 2021 was the year of the mega-round, 2022 was the year for new space start-ups.

The industry as a whole attracted $8.9 billion of investment in last 12 months

Seed deals were up 50 per cent in the year, an indicator that investors still see potential for strong returns from the sector and many companies were formed in 2022. Numbers of deals grew significantly in Europe and Asia, which was indicative of many new start-ups forming in those regions.

Companies making up the “Build and Product” categories (mostly space hardware and data platforms) saw a year-on-year increase in investment.

The Seraphim Space index provides a barometer for investment activity within the NewSpace Ecosystem. It shows global volume and value of venture capital deals within the Space sector on a 12-month trailing basis.

In the final quarter of 2022, the top 10 deals accounted for 54 per cent of the total investment in the sector.

Just two rounds in excess of $100 million were raised this quarter, once again showing the difficulty of raising growth funding rounds in the current economic environment. These rounds were also in drone and location-related companies.

Although overall top-10 round sizes were lower, it is notable that downstream Product companies were able to attract relatively large rounds, such as BeZero Carbon, the London-based global ratings agency for the Voluntary Carbon Market, this could be thanks to their climate focus, a key area of investor interest in 2022.

Read more - Surrey’s Clutch Space signs letter of intent for micro ground station demonstration

While the top investment of the quarter went into the German company Volocopter which says it is launching the world’s first-ever eVTOL suite of services, including passenger air taxis and heavy-lift cargo drones, when it raised $182 million in a Series E funding round, UK company BeZero raised $50 million in a Series B funding round, while Orbex, which is developing a small commercial orbital rocket called Prime, raised $45 million.

Separately, The Seraphim Team has also published its predictions for the Space sector this year, discussing some of the biggest trends they expect to see in 2023. This includes its prediction that, in defiance of recent funding trends, the largest (private) investments will occur in 2023.

The company said: “Despite the backdrop of greater economic uncertainty, raising interest rates, soaring inflation and recession we believe new records will be established in SpaceTech in terms of giant commercial projects being funded. Whilst the second half of 2022 saw growth staged funding rounds reduced and postponed due to economic uncertainty, we believe several megarounds will close in 2023, producing another overall record year.”

Seraphim Space Accelerator, has also entered a partnership with the European Space Agency (ESA).

The European Space Agency is dedicated to the peaceful exploration and use of space for the benefit of humankind. With an annual budget of €8 billion, it is pushing the frontiers of science and technology, to promote economic growth in Europe. ESA has long recognised the valuable role start-ups play in the space industrial ecosystem.

The partnership is part of the ESA’s new strategy of working with investors (ESA Investor Network) and business accelerators to support early and growth-stage SpaceTech ventures that have the potential to solve some of the world’s most pressing climate, communications, and security issues. The partnership is designed so the ESA, through working with Seraphim, can help identify and support European Space start-ups by providing access to the global Space Venture Capital market, which represented over £8bn of investment in 2022.

Rob Desborough, Managing Partner and CEO at Seraphim Space Accelerator said: “We are delighted to be partnering with the European Space Agency and share its vision to help grow Europe into a global leader within the space sector.

"The Seraphim Space Accelerator has a track record of providing the right expertise and leadership to help companies to achieve their growth potential. Together with the ESA, we can help European space enterprise scale at pace and help solve some of the most pressing issues across the climate, communications, mobility and cyber security industries.”

Luca del Monte, Head of the Commercialisation department of the European Space Agency said: “Connecting European space industry with the investors’ community is one of the key strategic goals of the ESA to stimulate the growth of a vibrant and competitive new generation of European space entrepreneurs”

Read more - Oxfordshire’s Satellite Applications Catapult forms part of new Space Partnership