In a finance panel at #ascendspace, Douglas Jarl of Barclays predicts a wave of M&A activity among space companies in the next 12-18 months, “if not sooner.” If not able to raise capital you need, he says, options are M&A or failure.Nathan Whigham of EN Capital agrees, and offers a specific prediction: if Astra gets delisted, it will get acquired by somebody quickly; several other space companies not far behind. #ascendspacePanel also sees opportunities for private equity rollups, like Redwire. Most exits for space companies in the near future, they predict, will be M&A or private equity deals, not public offerings. #ascendspaceIs there sufficient capital and interest in private markets today to fund space ventures with high capex like constellations and space stations? Panel is skeptical, but credit markets may be an option. #ascendspace
Virginia-based data relay company SpaceLink is shutting down, saying financial difficulty with Australian parent Electro Optic Systems made SpaceLink unable to raise needed external capital.SpaceLink had won contracts with NASA & DARPA, and an R&D agreement with the U.S. Army.SpaceLink VP Wendy Newman statement:“This is a good example of the trend for investors to take a more conservative approach to pre-revenue startups in today’s economic environment …”as “…timing should have been great for a company prepared to address the burgeoning market for real-time space relay communications.”
For satellite service providers and hardware builders, the question is not complicated or new:What’s your survival strategy when SpaceX’s Starlink and Amazon’s Kuiper constellations are fully operational?Both appear intent on creating their own ecosystems with proprietary standards, so forget selling much to them. Both appear able to go for many years, spending billions of dollars, before becoming profitable.Several possible answers were offered during The HTS Roundtable, organized Dec. 8 by c21...
For most anyone with money in the market, 2022 was a year to forget – and space stocks were no exception. While the sector has continued to grow, many of the companies who took the fast SPAC way out ran into a wall this year.Remember, these space SPAC names all came to market at about $10 a share. Now, seven such companies trade under $2 a share. Astra, Momentus and Spire each slipped under $1 in the past few months. Even shares of Rocket Lab and Planet – two of Wall Street’s favorite space de-SPACs, with some of the strongest revenue and cash positions – have given up half their go-public value.
The key theme for aerospace within financial markets has been the bifurcation of performance between the traditional aerospace and defense (A&D) sector and space SPACs. Despite the broader market’s abysmal performance this year, traditional A&D companies have outperformed phenomenally. Companies like Lockheed Martin, Raytheon, Northrop Grumman, and BAE Systems are trading 15%–37%+ YTD. The sector has strengthened on increased demand in response to Russia’s longer-than-expected war in Ukraine and the growing threat posed by China, a military and space near-peer adversary.
Last year was rough for many space startups.Overall investment dropped 58 percent from its $47.4 billion peak in 2021 to $20.1 billion in 2022. Still, Chad Anderson, Space Capital managing partner, thinks the downturn will make the sector more resilient.“We see the shift away from momentum investing and back to a focus on fundamentals as a net positive for the space economy, since it will reward quality companies and discipline those that have weaker fundamentals and are struggling to execute,” Anderson said by email.
If it was easier to raise money, Plasmos might have a dedicated facility for testing rocket engines. Instead, the propulsion startup rented a speedboat restoration shop east of Los Angeles.There, “we managed to test something, and it was successful,” said Plasmos CEO Ali Baghchehsara. “We managed to create plasma in the engine and got high ionization using air.”After years of sky-high valuations and investor competition for shares of promising space startups, high interest rates and the threat of recession have made investors cautious. In response to a lack of new funding sources, space startups are cutting back on hiring, reducing travel and giving up leased office space.
Did you know that @esa and @euronext have created a European Space stock index? The index is called EN HELIOS SPACE and it is found here: https://live.euronext.com/en/product/indices/NLIX00000983-XPARIs it any good?A thread1/12 According to ESA the HELIOS SPACE index will be a "barometer", a "benchmark" and will "raise awareness" on space companies.But can the index fulfill this promise?https://commercialisation.esa.int/european-space-index/2/12Sadly no.I have found that about half the companies in the HELIOS SPACE index have a space business representing less than 1% of their total business. But since they are the largest in the index, they represent 75% of the index value.https://live.euronext.com/en/product/indices/NLIX00000983-XPAR/market-information#index-composition3/12Moreover: 50% of the index capitalisation is composed of companies involved in electronic components manufacturing, whose exposure to the market of space components is very small, in the order of a fraction of %.4/12My estimate is that less than 3% of the stocks included in the HELIOS SPACE index is driven by space activity. In other words, this index is unable to capture any trend affecting the space sector at large. Trends in aero and electroncs will drive most of its value.5/12I wish now to digress a little on some companies that are included, starting with the ones that are, in my opinion, completely unrelated to space. For instance @Lilium is an electric plane business. Why is it in the "space" index?6/12 Similarly @aerovironment "AeroVironment, Inc. is an American defense contractor headquartered in Arlington, Virginia, that designs and manufactures unmanned aerial vehicles. " what is it doing in the HELIOS SPACE index? It is not space, and it is not even European...7/12 And what about @TomTom ? Admittedly their business doesn't exist without GNSS signals, but that's it. TomTom's business is driven by a majority of non space factors (retail prices, car sales, chip supply/price, touch screen techn, consumer habits...). Why include it at all?8/12 And @fugro ? How much of their business is supported by satellite data? Looking at their wesite: very little. They are not even particularly know as being large customers for EO data.9/12So are there better options out there? Well in the US there are three well know ETFs labelled "space", and I have mixed feelings about two of them.10/12https://etfdb.com/themes/space-etfs/My estimate is that of the three ETFs, only UFO has a good relavance to space (60%)It is followed by ARKX (30%)SPEAR ALPHA is a bit like HELIOS SPACE, with less than 5% of its value being driven by space markets dynamics.11/12https://procureetfs.com/ufo/https://ark-funds.com/funds/arkx/And now, to complete the picture, let me recall the Newspace index by @spaceworks that brings together the newest space business listings on NASDAQ.This index is almost 100% 'space' (@virgingalactic is suborbital, despite the name).12/12 --end--https://www.spaceworks.aero/commercial/new-space-index/And you may have noted that I mentioned the wrong @SpaceWork account. My intention was to mention @SpaceWorksSEI of course. My apologies to both accounts.
Space startups will need to step up their fundraising efforts if they want to raise money this year from increasingly meticulous investors, according to a panel of early-stage space investment firms.A “dosage of reality” is trickling through the space industry, AE Industrial Partners vice president Tyler Letarte told the SmallSat Symposium Feb. 7 in Mountain View, California.“For a number of months in 2021, people saw some home-run deals,” Letarte said, “people saw some early investors be very successful, and you started seeing some new money come into that market.
Large defense companies are itching to buy space assets as part of the market is on the verge of a shake-out, executives discussing deal-making in the industry said Feb. 8.Phillip Ingle, a managing director in Morgan Stanley’s investment banking division, highlighted large “appetite for the big primes to get their hands on attractive space assets” during the SmallSat Symposium in Mountain View, California. U.S. Department of Defense budgets orientated “towards space are growing much more healthfully than other parts of the defense budget,” Ingle said, encouraging primes “to grow their space businesses because that’s where a lot of the growth is.”
I bit the bullet and bought 1,000 shares in RKLB. My thinking is that the current share price represents the actual worth of the company, whereas the former high price included some hype and buzz.There is a decent chance that the share price will rise, although nothing is sure.
And, on cue, Rocket Labs dropped 4% immediately after my purchase.
Funding to VC-backed space tech startups — defined here as space travel, satellite communication and aerospace — has dramatically decreased in the last year-plus, and this year is on pace for the lowest total dollars since 2020, according to Crunchbase data.Like most sectors, space tech funding rocketed to the stars in 2021, hitting an all-time high of $12.1 billion in more than 450 deals. The sector only saw about a 25% decline last year, when space tech startups raised $9 billion in just under 400 deals.However, this year has been a different story. With the year more than half over, the sector has witnessed only $2.4 billion of funding in just 172 deals.
A relevant article:Space Tech Funding Comes Back Down To Earth - CrunchbaseRelevant quote:QuoteFunding to VC-backed space tech startups — defined here as space travel, satellite communication and aerospace — has dramatically decreased in the last year-plus, and this year is on pace for the lowest total dollars since 2020, according to Crunchbase data.Like most sectors, space tech funding rocketed to the stars in 2021, hitting an all-time high of $12.1 billion in more than 450 deals. The sector only saw about a 25% decline last year, when space tech startups raised $9 billion in just under 400 deals.However, this year has been a different story. With the year more than half over, the sector has witnessed only $2.4 billion of funding in just 172 deals.As far as investing personal funds in space companies, I would treat any investments like I treat money that I use to gamble with. In other words if you aren't OK with throwing that money in a fire and walking away, then investing in space startups may not be the right thing for you.True story - I had been an Apple Computer user since 1989 when I bought a Macintosh SE, and I was sad when Steve Jobs left the company and Apple started drifting. Steve Jobs came back at the end of 1996, and I invested a couple of thousand in Apple stock in 1997 because I believed the company and wanted to support it. That story had a good outcome, but I was fine with the money going to zero.So invest for the passion, but only invest what doesn't matter to your future - because the odds are that your investment will go to $0.That said, if a non-profit gets created as part of the effort to colonize Mars with SpaceX, I'll be donating to it because I believe in the goal, not that I expect an ROI in my lifetime.
Impulse Space, the rocket engine company from SpaceX vet Tom Mueller, says it raised a $45 million Series A...some start-ups are still finding VC backing!
