Despite challenging economic times in 2022, investments in the space tech sector have shown signs of recovery this year. The industry has demonstrated resilience amid macroeconomic uncertainty, with approximately $4.8 billion invested by the end of Q3. Growth-stage investment activity has increased, and M&A activity in the space sector is on the rise.
Historic space industry events in 2023, such as India’s moon landing and SpaceX’s Starship advancements, have garnered mainstream news coverage. Sovereign nations and private companies are increasingly focused on developing their own space capabilities, recognizing the importance of the global space economy.
Technological developments are ongoing, especially in sectors like life sciences and material sciences, which are expected to have a significant impact on pharmaceuticals, telecoms, and microelectronics. The developments in 2023 have set the stage for more exciting advancements in 2024, including governments bolstering their independent space capabilities and the NewSpace market soaring to unprecedented heights.
The Department of Defense’s commitment to harnessing cutting-edge technologies from innovative NewSpace companies is expected to stimulate further investment and innovation in the sector in 2024. Additionally, M&A consolidation is anticipated to continue, particularly in the satcoms and earth observation sectors.
In the public markets, sentiment is tied to milestones achieved by SpaceX, particularly the success of its Starship launch and the potential IPO of Starlink, which could reshape the investment landscape. The moon also continues to be a focus, with countries like Japan and commercial lunar missions expected to make significant strides in 2024.
Regulatory momentum is expected to propel the Earth observation market forward, while the development of low-cost, frequent return-to-Earth capabilities will unlock the next phase of the space sector’s growth. Additionally, advancements in life sciences and material sciences in the microgravity realm of space are anticipated to have a transformative impact in various industries.
Overall, VC investment in space tech is expected to continue its rebound in 2024, with both early- and growth-stage investment activity increasing, particularly in the United States, the United Kingdom, Europe, and Japan.