Tourism, satellites, and garbage. Which space directions are more likely to generate income in the next 10 years? The estimated number is $1.4 trillion by 2030.
Oleg Krot, the Managing Partner of TECHIIA holding
Bitcoin has dropped yet again, gold and the US dollar are falling in price from government infusions. Investors are confused. The question of "what to invest in" has once again become incredibly relevant.
One of the obvious answers is right above our heads. It's about space. And not just because some of the richest people on the planet went there: on July 11, the British billionaire, Richard Branson, came in at 90 km on a rocket plane of his company Virgin Galactic. And yesterday, July 20, the richest man on the planet, the founder of Amazon and Blue Origin Jeff Bezos did the same.
Last year, the space industry generated revenue of $350 billion. Bank of America, by 2030 its total revenue will be $1.4 trillion.
I would like to share some trends that I see in this area, and tips on where to make money outside the atmosphere.
The Space Pace
Space exploration has never been at such a high pace. And this is despite the fact that the previous concept of the space conquest was declined. Today, the emphasis is not on launching manned missions, but on creating space infrastructure.
This project creates a huge number of products and services, including quite unusual and, at first glance, unnecessary.
Take, for example, the working for the Qtum blockchain from space. The authors of the project claim that the transition to a simpler but less energy-intensive algorithm and space mining is a necessary step for the mass usage of cryptocurrency.
And the founders of such projects have fewer problems attracting funding. Countries remove the restrictions and weaken regulatory policies on space one by one. Private companies gain more access. Anyone can invest money into this sector.
The entry threshold decreases while interest, on the contrary, increases. As a result, the amount of investment in space is skyrocketing. Last year, a record amount of money was in the area — $8.9 billion. But investors didn’t stop there, only in the first quarter of 2021, $5.7 billion in space companies.
Revenue of Space Industry
Data source: Haver Analytics, . The bank's analysts expect $1 trillion by 2040 — later than competitors from Bank of America.
What affects the investors’ activity?
There are several reasons why space attracts money faster.
1. Boom of special purpose acquisition companies (SPAC)
SPAC is a relatively new investment instrument. In essence, these are pacifier companies, companies without operating history. They are created for mergers or acquisitions and subsequent listing of other enterprises.
Virgin Galactic was the first space company to take off after the SPAC merger. In 2019, venture capitalist Chamat Palihapitiya $800 million for 49% of Richard Branson's travel service.
Since then, Virgin Galactic shares have quadrupled, and the transition to SPAC has become a trend for space projects: Astra Space, Momentus, Redwire, and Voyager Space Holdings have become public companies under this game plan.
Last year was the most active in the number of mergers and acquisitions in the history of the space industry: $7.7 billion was invested in 200 companies in the SpaceTech sector. But 2021 is guaranteed to break this record: only in the first quarter, there were worth $7.2 billion.
2. Hype around the satellite internet project
Today, the concept of broadband, provided by satellites in low Earth orbit, is implemented by three companies — SpaceX, Telesat, and OneWeb.
At the beginning of the year, they all successfully closed the next rounds of funding. SpaceX raised $850 million, and raised $ 400million each. The media relished the details, and investors poured money into all space-related projects.
3. The hype around space tourism
Space tourism is gaining momentum, and news is making this topic hotter than the sun. On July 11, Richard Branson went into space, even if its borders are in dispute. On July 20, Amazon founder Jeff Bezos went there too. His company Blue Origin has put a seat in its New Shepard on sale. Someone $28 million for the ticket but never flew. Instead, 18-year-old physics student Oliver Demen boarded the ship.
4. Amazon’s and Microsoft’s space programs
In June 2020, Amazon Web Services the launch of a new space division — Aerospace and Satellite Solutions. It will work on any space-related project — from rocket launch to the creation of flight control systems and satellite systems.
Three months ago, Microsoft the Azure Orbital service, which allows you to connect satellites directly to the Microsoft Azure cloud network.
Where to invest?
Now that we know what to focus on, let’s check the according to the StartUs Insights analytics company:
- nanosatellites;
- production of goods for space exploration;
- satellite communications;
- management and disposal of space debris;
- power plants for a new generation of missiles;
- space management (services for tourists, satellites, and stations);
- conducting space missions;
- asteroid mining;
- launch of satellites in low Earth orbit;
- data processing and analysis received from satellites.
Here are some not-so-obvious areas to make good money on
1. Satellite Internet
Morgan Stanley analysts that broadband satellite Internet will bring around 50% to 70% of global space revenue in 20 years.
According to MS, the cost of a megabyte of wireless data will decrease many times over. In 2040, it will be less than 1% of today's level. But the profitability of the sector will be associated with growing demand for these services. Not only because of the advent of the Internet in places where it does not yet exist but also given the increased demand for new segments, such as autonomous cars, the Internet of Things, artificial intelligence, virtual reality, and streaming video.
2. Space tourism
In 2020, space tourism earned $800 million. By 2030, , this segment of the space industry will generate $3 billion a year.
3. Asteroid mining
So far, asteroid mining is perceived by many solely as a concept. In any case, no one can name the exact date of launch of the first device on the asteroid.
However, the shares of such companies are traded on stock exchanges, and investors in space mining Alphabet’s CEO Larry Page, Virgin Group’s founder Richard Branson, and Ethereum co-founder .
If we consider the extraction of minerals in space solely as an investment opportunity, it should remember that this segment is growing by 24% per year, and by 2025 its capitalization $2.84 billion.
4. Satellite Manufacturing
There are now about 3,000 active satellites orbiting the earth, but their number is constantly increasing. SpaceX alone is going to increase the number of its own satellites to 40,000.
The demand of the modern market for satellites and infrastructure is so great that by 2028 the capitalization of this sector $485 billion, while in 2019 it to $279 billion.
Satellites are a reliable long-term business: the service life of a modern device is 15-20 years. Afterward, it needs to be replaced with a new one.
5. Space junk removal
Earth's orbit already looks like a dump. Right now, in addition to 20,000 large objects, more than 100 million fragments, ranging in size from a millimeter to 10 cm, are circling above our heads.
Moving at a speed of 30,000 km/h, even tiny debris is a threat to working satellites. At least that's why the problem needs to be solved urgently. In addition, the future of the entire space service market depends on that solution, so there are enough projects for space junk removal.
The amount of space debris around the Earth. Credits:
Today, there are Earth's space monitoring companies (Electro Optic Systems), satellite collision prevention services (LeoLabs), companies that create solutions for waste disposal (Launchspace Technologies), and even space tugs that can bring satellites into the required orbits, even for recycling purposes (D-Orbit).
The demand for such projects is huge. Let’s take the Japanese startup Astroscal, for example. The company creates devices for decommissioned satellites and disposal of other space debris. A year ago, after the investment rounds, the project $191 million.
Every year there will be more satellites and over time they will have to be disposed of. Today, the sector is growing by 27% per year, despite the fact that Astroscale the first satellite cleaner only in March this year.
According to , by 2030 the space waste market will grow to $273 million. Who knows, maybe you will also be a part of this market?
The beauty of space is that it literally helps us look at investment more broadly and live with longer-term plans. Not only in terms of earnings but also the future of technology and the planet as a whole.
I do believe that it’s worth paying attention to!
Original article: .
