Space Tech: The Next Giant Leap For Investors?
- The camera phone: In the 1990s, NASA’s Jet Propulsion Laboratory team invented a light, miniature imaging system that consumed minimal energy to take high-quality photographs from space. A third of all cameras in our smartphones and computers today contain this technology and are being carried around in our pockets everywhere we go.
- CAT Scans: Originally invented to recreate images of the moon during the Apollo missions, the digital signal technology is now the underlying tech in CAT and MRI scans.
- Memory foams: Created to cushion astronauts during high-force takeoff and landing, the visco-elastic foam seats were created to mould to bodies and return to standard after use.
- Athletic shoes: Former NASA engineer, M. Frank Rudy, pioneered the infamous “hollowed-out” midsole in Nike Air trainers by using tech developed originally for space helmets.
- Wireless headsets: To enable astronauts to be hands-free, NASA invented communication tech that worked without wires.
- Freeze-dried food: After researching how to preserve and pack more food into the aircraft, NASA developed freeze-drying, which retains 98% of the nutrients and weighs only 20% of the original weight.
A billionaire’s space mission
There is a reason some of the world’s wealthiest people are obsessed with space exploration: for ambitious entrepreneurs and would-be world changers, Earth is last year’s news. Instead, space is the place they want to be – because cosmology – more than any other curiosity – profits from mystery. According to Dan Tynan, we should “forget gilded mansions and superyachts. Among the tech elite, space exploration is now the ultimate status symbol.”
Elon Musk has SpaceX; Jeff Bezos has Blue Origin; Richard Branson has Virgin Orbit. Musk famously joked that he hoped to die on Mars – just not on impact. He believes in preparing for “plan B” as he fears that Earth will inevitably endure an extinction event, so the alternative is to become a spacefaring civilisation and a multi-planetary species. Setting his sights on colonising the Red Planet as soon as 2022 through the use of a 400-foot-tall rocket, Musk plans on ferrying 100 colonists at a time, over a period of decades.
Branson has his heart set on opening space for everyone and enhancing life on Earth. He believes that small satellites enable a new era of capabilities by stimulating the global economy, connecting rural communities, monitoring global climate change and expanding the limits of human knowledge. Currently, roughly 3,000 active satellites are orbiting above Earth, with that number expected to skyrocket in the coming years. By 2025, experts predict a 230% increase in satellite launches per year, with 24,000 launches currently in planning – and that figure doesn’t include launches by Tesla, OneWeb, Kuiper or SpaceX’s Starlink that has already applied to fly 40,000 satellites.
Meanwhile, Russian entrepreneur, Yuri Milner, is driven by questions about life in the universe, asking: Are we alone? Is there life elsewhere? In April 2015, he announced a $100m investment for research into using lasers to fling tiny robots towards the stars at one-fifth the speed of light, in a radical plan to search for life beyond Earth. The Digital Sky Technologies founder hopes his Breakthrough Starshot initiative will develop spacecraft that can reach Alpha Centauri, the closest star to our solar system, within 20 years.
Once we discover how to economically transport heavy machinery into space, permanent “off-Earth” manufacturing could become a reality. More than just cutting costs, benefits can derive from work conducted in the cosmos as sometimes the microgravity conditions are considered ideal for developing materials. For example, protein and virus crystals can potentially enhance drug research and provide new therapies and medical treatments for infections and diseases. ZBLAN, a fibre-optic cable that can perform better light transmission over long distances that supports telecommunications, lasers and high-speed internet, can develop tiny crystals that result in signal losses when manufactured on Earth. When built without such flaws, the cable can provide better performance.
Investing in space
Investors are therefore focussing on the myriad of increasing investment opportunity. Since 2008, interest has escalated: the global space sector has grown over 42%. With ambitions to place the UK at the forefront of space innovation, the British government awarded £7 million to 21 UK organisations in December 2020 and has seen 91% growth in the sector.
2020, and 2021, has also brought a constellation of space companies going public, often through SPAC. We are now witnessing a seismic shift of interest in a sector with an infinite growth trajectory; in the past ten years, $177.7 billion of equity investment has generated 1,343 space companies. Whilst expertise, tenacity and upfront capital are required to launch viable space-based businesses, today’s entrepreneurs and space explorers are meeting the challenges of building a robust commercial space industry. As co-founder of Space Ventures Investors, Simon Drake, says, “what separates space investing apart from other sectors is that the space industry has no boundaries; humanity will always be pushing new frontiers. However, in the short term, the preservation of share capital and analytical study of where and what to invest forms the base on which the space industry revolution will grow.” So our question is: what part of humanity do you want to change?