2015 was a fantastic year for the space industry and for Space Angels Network. According to Space Angels Network data, equity investment in commercial space companies, excluding acquisition and public offerings, topped $3 billion for the year. This was driven by a few large transactions including a $1 billion investment in SpaceX by corporate investor Google Inc. and a $0.5 billion investment in OneWeb by corporate and private equity investors Qualcomm Technologies Inc and Virgin Group. Approximately 70 venture capital firms invested in one or more private space ventures, up nearly four times over the number of firms that invested in 2014. Space Angels' global network grew to 110 accredited investor members, making us one of the 10-largest angel networks in the world, while providing our members even more benefits and greater access. And with this momentum showing no signs of slowing, 2016 is poised to be even better. But first, to celebrate the end of 2015, we’d like to reflect back on some of our favorite space industry highlights from the year:
In addition to many exciting scientific missions (New Horizons flyby of Pluto and its moon Charon, discovery of difinitive liquid water flows on Mars, the Cassini orbiter discovery of ice volcanoes on Enceladus feeding Saturn's rings, Astro Kelly’s year in space, and the awakening of Rosetta), there were also a number of game-changing commercial developments, making space more accessible and affordable than ever before.
Rocket ReusabilityTo kick off 2015, SpaceX attempted “Mission Improbable”, the first-ever drone ship landing attempt in January, which ended in spectacular fashion. In April, SpaceX launched Dragon to the International Space Station (ISS) and the Falcon 9 first stage attempted to land on the autonomous drone ship, aptly named Just Read the Instructions, and then crashed. The company conducted a successful pad abort test in May, a significant milestone on the path to crewed missions to ISS. And of course, in December SpaceX finally stuck the landing, on land, at Cape Canaveral. SpaceX founder Elon Musk has since predicted a 70% success rate in Falcon 9 landing attempts for 2016.
In April, Blue Origin's New Shepard suborbital vehicle launched to 94km and while the crew capsule parachuted to ground safely, a hydraulics problem caused a crash of the propulsion module. In September, Blue Origin unveiled plans for a two-stage orbital launch vehicle. And in November, Blue Origin performed the second test flight of New Shephard, which reached a peak of 100km and the propulsion module made a successful powered vertical landing. While this feat was immediately compared to what SpaceX had been trying to do all year, The Verge did a great piece on why you shouldn't compare the two.
For startups and would-be space entrepreneurs, what is most important about these advancements is the increased access to space that reusable launch promises. This, in combination with the miniaturization of technology and standardization, is making space accessible to startups and entrepreneurs on an unprecedented scale. Historically, getting something into orbit was so expensive that triple redundance was built into every satellite component, to ensure that it worked when it got there. This risk aversion required extensive on the ground equipment and facilities for testing in a simulated space environment, which ultimately drove development costs up astronomically. However, entrepreneurs have started to realize that by building the redundancy into a number of small low-cost satellites, they can skip the expensive on the ground tests and test in the actual space environment. In April, at a meeting of the National Research Council’s Space Studies Board in Washington, NASA associate administrator for science John Grunsfeld summed up this point brilliantly, saying that it is "getting to point where it’s cheaper to test tech by flying it in CubeSat launched from ISS than putting it through ground tests."
Low Earth OrbitAt the beginning of 2015, the ISS was scheduled to decommission in 2020. However, during the year the US and Russia committed to their ISS partnership and extended the in-orbit facility through 2024, at which time the agencies will stop supporting the space station. In December, Bill Gerstenmaier, NASA's associate administrator for human exploration and operations, announced to the public that NASA was moving on from low-Earth orbit, leaving it to the private sector, while NASA ramps up for its human missions to Mars in the 2030's. Fortunately, it appears that the private sector is positioned to step right in. In March, Bigelow Aerospace completed work on an inflatable space habitat module called BEAM that will be flown to and installed on the ISS. Bigelow handed BEAM over to NASA for launch to the ISS in February 2016. The company claims that it will have BA330 (Bigelow Alpha 330CM) modules ready for orbit by the time that commercial passenger spacecraft are available to ferry astronauts to them - expected in 2017.
Space For GoodThere was a lot of chatter in 2015 about large constellations of communications satellites intended to connect the "other three billion" people on Earth who are not yet connected to the internet. Just as cellphone towers allowed emerging economies to leapfrog costly copper wiring projects, satellite internet promises the ability to connect billions of people without requiring expensive infrastructure projects to lay fiber. Greg Werly, founder of satellite communications company O3B, announced a $500M investment in his new venture, OneWeb, which is planning a constellation of 720 low-orbiting internet delivery satellites. Just days after the OneWeb announcement, SpaceX announced that they had submitted, to international regulators, the necessary documentation for a global satellite Internet project for 4,000 satellites in low Earth orbit and initial service within five years. And then later in the year, Facebook and Eutelsat agree to lease Ka-band capacity on Isreal-based Spacecom Ltd.’s Amos-6 satellite to provide internet access to 14 Sub-Saharan African nations.
Illegal, unlicensed, and unregulated fishing costs the global economy $23.5bn annually and is testing the resilience of our home planet's life support system - our oceans. Monitoring and enforcement of this activity is challenging, especially in remote parts of the world. Satellite data is playing a key role in helping to put an end to illegal fishing. Our partner organization, Satellite Applications Catapult (UK) and the Pew Charitable Trusts have developed a virtual watch room to combat illegal fishing and preserve our most important natural resource.
Earth’s surface temperatures in 2015 were again the warmest on record (since record keeping began in 1880), according to independent analyses by NASA and the National Oceanic and Atmospheric Administration (NOAA). The 2015 United Nations Climate Change Conference (COP21) in Paris was a historic moment, as nearly 200 nations agreed to mitigate and adapt to climate change. Satellites have played an essential role in our understanding of our planet and the changes to it. In a positive step for space companies looking to provide weather data, in May the U.S. House approved a bill requiring NOAA to publish standards for commercial weather data buys by the end of the year. And in September, NOAA put out a commercial space policy, the first step in procuring weather data from commercially operated satellites and instruments. There are a number of space startups looking to sell weather data to NOAA including Spire, GeoOptics, and others. In September, India’s PLSV rocket launched four commercial US weather satellites for Spire. Until now, US companies were prevented from launching on Indian rockets, so this is a big step forward. PlanetIQ would later sign a contract to launch two commercial weather satellites on an Indian PLSV in late 2016.
OUR PORTFOLIO SUCCESSES
2015 was also a fantastic year for many of our portfolio companies:
Planet Labs closed an oversubscribed Series C, with investment from Space Angels Network and the International Finance Corp., which is allowing them to speed up production of their online distribution platform and API. The company’s valuation soared in 2015, according to venture capital research firm Pitchbook Inc., to $1.1 billion as they launched 42 satellites over four successful launches during the year.
Planetary Resources' first satellite was successfully deployed and is now testing asteroid prospecting technology on orbit. The company closed a Series A round of financing, with follow-on investment from Space Angels Network, to support the growth of their remote sensing business as they develop the technologies to identify and claim asteroids for mining. And of course Congress passed the U.S. Commercial Space Launch Competitiveness Act, legislation that extends indemnification and a regulatory grace period for the commercial launch and spaceflight industries, respectively, and grants companies rights to resources they extract from asteroids and other solar system bodies beyond Earth.
Astrobotic Technologies, a company with plans to offer routine, reliable, and inexpensive transportation service to the lunar surface, had a great year as well. The company asserted their dominance as the frontrunner of the Google Lunar XPRIZE by becoming the only team to win all three milestone prizes (for landing, mobility, and imaging), claiming $1.75 million in prize money. The company continued to build their customer base by signing the Mexican Space Agency and other GLXP teams as paying customers. Astrobotic was also welcomed to the White House where they received praise from President Obama. In a very promising move for lunar businesses, the new European Space Agency (ESA) Director, Johann Dietrich Woerner, announced plans to build a human outpost on the Moon dubbed "Lunarville".
NanoRacks further solidified their position as the "concierge to the stars" by signing some significant agreements. The company signed a deal with Made in Space, an space-based additive manufacuring company, to build and deploy printed satellites in orbit. The copmany also signed an agreement to provide commercial payload services on flights of Blue Origin’s New Shepard suborbital vehicle. Additionally, NanoRacks and Space Angels Network joined forces to support and invest in STEM education and early stage-space companies by using the DreamUp Approved system.
World View Experience conducted a successful test flight of their 50% scaled prototype pressure capsule to 100,000 feet, working toward near-space balloon tourism, with their next milestone full scale testing. Alan Eustance, founder of Google, hung below that balloon and broke Felix Baumgartner’s high-altitude skydiving record.
RECORD LEVELS OF INVESTMENT
The space industry was the fastest growing area of tech investment in 2015. A great analysis showed the space industry in the top four, but was missing quite a bit of investment data from this rapidly expanding industry. Folding in Space Angels Network vast proprietary database of investment activity in the space sector, we calculated a CAGR of 180% from 2012-15. In fact, in the last 10 years over $20 billion of non-government capital has been invested into commercial space companies, and this number is increasing exponentially.
At Space Angels Network, we have experienced the increasing demand for space investment opportunities first-hand, as demonstrated by the significant growth in the number of our accredited investor members and investment capacity. Founded in 2007, Space Angels Network has been supporting space startups since before the first successful SpaceX launch, and are uniquely positioned to support the continued growth of the industry. While our members do include some of the most established space investors and entrepreneurs in the sector, about half of our members are from outside the industry, and our network provides these investors inside knowledge to help them get up to speed quickly. If you're interested to participate in this exciting new industry, watch our two-minute video to see why Space Angels Network is the most efficient way to discover, select, and invest in the best space startups.
This past year saw record levels of non-government investment into commercial space companies - a total of $3.3 billion (excluding acquisitions and public offerings). As you can see from the first graph below, the majority of this investment was from corporates, but 25% was venture capital and angel/individual investment. The second graph below shows that the majority of this investment went to launch systems and satellites, well above 2014 investment levels. These are the foundational building blocks of the space industry, the backbone on which the sector will flourish in low Earth orbit, then to cis-lunar space, the Moon, and beyond.
Investment from Venture Capital and Angels (early-stage investors) really represents investment in startups and in 2015 investment in space startups reached an all time high. As you can see in the chart below, during the year these early-stage investors deployed over $800 million in capital to space startups, continuing the significant growth over the past five years.
In 2015, existing space investors increased their participation, while a number of new investors entered the sector. In 2015 Google Inc. (corporate) increased their participation in the new space race by investing nearly $1 billion in SpaceX and taking over the hangar at Moffett Field. In June, it was announced that Virgin Group (private equity), Qualcomm Inc (corporate), Coca-Cola Founders (venture capital), and others were making a $500M investment into OneWeb, founded by O3B founder Greg Werly, that plans a constellation of 720 low-orbiting internet delivery satellites. Venture Capital investors Sequoia, Bloomberg Beta, and Google Ventures all got into space game for the first time in 2015 with an $8.7M investment in Orbital Insight, while Bessemer Venture Partners established a space-focused group and Lux Capital increased participation with investments in a number of space startups. Overall, approximately 70 venture capital firms invested in one or more private space ventures, up nearly four times over the number of firms that invested in 2014.
Acquisitions. This new entrepreneurial space industry is still young. To remind ourselves of that, a few key data points to remember are that Google Maps was first introduced to the public just 10 years ago, SpaceX's first successful launch of Falcon 9 was just five years ago, and Virgin Galactic secured significant outside investment just five years ago. We are still early in the development of this entrepreneurial space business and, until now, investors have had to look to rising valuations as a signal of growth. However, as the industry continues to grow and mature, we are beginning to see more exits. A handful of notable acquisitions in 2015 totalled nearly $4 billion:
- Urthecast (founded in 2010) acquired Deimos Imaging for $84 million and announced plans to develop a constellation of 16 optical and radar satellites
- Planet Labs (founded 2010) acquired BlackBridge (Rapid Eye), for an undisclosed amount
- Exelis Corp. (founded 2011) was acquired by Harris for $4.75B (70% cash),
- Skywave (founded 1997) and InSync (founded 2003) Software acquired by Orbcomm for a combined $140 million,
- Honeywell acquires component maker Com Dev for $455M CAD
For all that was accomplished this past year, 2016 looks like it will be even better. Already this year we've seen the first 3D printing of asteroid materials, SpaceX reported no damage to its recovered Falcon 9 rocket, NASA awarded three new contracts with SpaceX, Orbital ATK, and Sierra Nevada Corporation to provide cargo resupplies to the ISS, Boeing released a video of its 100 year vision, ULA outlined CS-1000 and plans to work with space startups to develop cis-lunar space, The Martian became the first Sci Fi movie to win best picture, and Virgin Galactic is planning to rollout its next spaceship in February. With this kind of a start, we can’t wait to find out what else 2016 has in store.
Space is one of today's fastest growing technology sectors and Space Angels Network is at the forefront of this trend, leading the world in funding new space ventures. With over 100 members across the globe, we are the largest network of space investors and entrepreneurs in the world. These sophisticated investors choose us and you should too. And with no membership dues, it's free to join. So what are you waiting for? Join Space Angels Network and start investing in space startups today!
There’s never been a better time to get involved in commercial space. If you’re ready to start investing in private space companies, we invite you to apply for membership to Space Angels.