Space tech startups fall out of VC orbit (updated)

Astra Space

18/10/2022 14:22

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    By Akash Sriram
       Oct 18 (Reuters) - Space technology startups are being
forced to limit their sky-high ambitions, as their
venture-capital backers turn to safer bets due to the current
economic turmoil, VC firm Space Capital said.
    Decades-high inflation, rapidly rising interest rates and
the Ukraine war have roiled global financial markets, forcing
investors to evaluate their investment strategies and focus on
companies with viable products in the market.
    Investments in space technology companies, which collect,
process and analyze space-related data, have fallen 80% in the
third quarter to about $1 billion from nearly $5 billion in the
year-earlier period, Space Capital said in a report.
    "Venture Capitalists are refocusing on enterprise
software-as-a-service companies and away from deep tech
companies that provide solutions based on engineering
innovation," New York-based Space Capital said.
    VC investment volume in space companies fell 44%, compared
with a broader market decline of 31%, it added. 
    VC firms "are looking to reduce their exposure to capital
intensive companies with low or long-term profitability models,"
Space Capital's managing partner, Chad Anderson, told Reuters. 
    "This is why space's infrastructure layer will be the
hardest hit during the economic downturn."
    The downbeat sentiment has also hit publicly traded "new
space" companies such as Rocket Lab USA  RKLB.O , Astra Space
 ASTR.O , Spire Global  SPIR.N  and Satellogic Inc  SATL.O ,
whose shares have fallen between 49% and 92%.
    Many investors who explored aerospace last year have backed
away, said William Kowalski, co-founder of Atomos Space, which
makes spacecraft that help satellites maneuver in space.
    "Fundraising has been challenging, but it has allowed more
capital efficient companies to stand out," he said.
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Venture capital investments in space companies dwindle    https://tmsnrt.rs/3MGp9N1
Space investment deals closed fall in Q3    https://tmsnrt.rs/3yOAsx4
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 (Reporting by Akash Sriram in Bengaluru; Editing by Anil
D'Silva)
 ((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;))