Space startups funding shows signs of recovery in Q3 - VC firm Space Capital (updated)

Astra Space

16/10/2023 15:26

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    By Jaspreet Singh and Akash Sriram
       Oct 16 (Reuters) - Global investments in space startups
rose for the first time in more than a year in the third quarter
as investors bet on companies with government contracts that are
considered more immune to a turbulent economy, a report showed
on Monday.
    The July-September period, which analysts usually see it as
a weak quarter, saw a 17% rise in funding to $3 billion for 103
companies, venture capital firm Space Capital said in the
report. Investments had stayed flat in the second quarter
following a months-long slump.
    The upbeat figures could mean that investors are returning
to startups that could tap government funding and develop tech
crucial to space programs.
    "It has long been the view that defense tech is a bad fit
for venture dollars, but the challenging economic climate is
proving that companies which can secure government contracts are
best positioned to maintain growth," Space Capital said.
    The companies funded in the third quarter included Axiom
Space which raised $350 million, and Sierra Space which saw an
inflow of $290 million.
    
    The infrastructure sector, which builds, launches and
operates assets in space, has led the industry funding this year
by garnering nearly three-fourths of the $11.6 billion in
investments during the period, according to the report.
    But prospects of a sustained sector recovery are clouded by
rising interest rates and sticky inflation. The rocky stock
market debuts of companies such as Birkenstock  BIRK.N  also
showed that investor sentiment remains fragile.
    "Despite continued headwinds in financial markets, the world
is waking up to the importance of space-based technologies,"
Space Capital said.
    According to some investors, the sector would benefit from a
rising adoption of new technology such as artificial
intelligence tools that have helped geospatial companies analyze
and interpret space-based images and data more effectively.

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Space startups returning to investors' orbit    https://tmsnrt.rs/3ZXhikR
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 (Reporting by Jaspreet Singh and Akash Sriram in Bengaluru;
Editing by Shilpi Majumdar)
 ((Jaspreet.Singh@thomsonreuters.com; https://twitter.com/i_jass;))