The economic data from Q1 confirms a significant overall slowdown in space investment activity, in line with other tech sectors and the overall markets. It further confirms that space is becoming a tale of two halves: those with strong fundamentals (ex: SpaceX, Planet Labs), and everyone else (ex: Virgin Orbit). While the overall trend was negative in Q1, there were a number of bright spots and Space Capital’s long-term forecast on the industry remains bullish.
- With another $2.2B invested into 89 space companies in Q1, there has now been $272.2B of equity investment into 1,746 unique companies in the space economy over the past 10 years
- The venture market continued its reset in Q1’23 driven by a challenging market and rate environment. Broadly, across tech, venture funding to startups fell by more than 50% YoY to $76B globally and $37B in the U.S., the lowest in 13 quarters. This directly affects investment in the Space Economy given that VCs continue to be the primary source of capital for space companies with $1.3B invested across 68 rounds in Q1, accounting for 60% of total investment and 76% of total rounds.
- After a brief rebound in Q4’22, total investments decreased 53% QoQ, the lowest quarter for space investment since 2015
- Comparing Q1'23 to Q1’22, total early-stage investment declined 59%, growth-stage investment dropped 18%, and late-stage investments fell by 90%