Last week I attended a timely webinar hosted by Space News on challenges and opportunities for space technology investment. While the speakers touched on the space investment horizon from a global perspective, this write-up will focus on what is happening in the U.S. – given the unprecedented geopolitical and macro forces at play.
Moderated by Jason Rainbow, Senior Staff Writer and Business Intelligence Manager, SpaceNews, the speaker lineup was featured impressively diverse perspectives:
Theresa Condor, CEO, Spire Global
Masashi Sato, Co-founder, Director and CSO, SPACETIDE
Kirk Konert, Managing Partner, AE Industrial Partners
Mark Boggett, CEO and General Partner, Seraphim Space
These are heady – if not frothy – times for space and defense technology startups, growth firms and larger brands seeking to tap into government and commercial investment in the space domain. But for all of the anticipated government space budget allocation and commercial enthusiasm, much remains undetermined.
For example, the Congressional Research Service warned that Congress still doesn’t have sufficient information to truly assess the Golden Dome program – which some analysts estimate could cost upwards of $175 billion over three years. Congress has already committed $25 billion off the bat. That said, Golden Dome is one component of several propelling space tech investment to historic levels and a potential model for how space assets are acquired.
The webinar speakers provided several key takeaways for all stakeholders across the defense tech and space tech ecosystem:
Institutional Investors Flocking To Space Tech
Konert underscored how quickly institutional investors have turned their attention to space and defense tech. Even as recently as 18 months ago, according to Konert, investor appeal was modest. But now this market is a “top” idea at many firms, with enthusiasm to help space tech brands raise capital, find strategic partners, accelerate M&A activity, etc.
While Konert acknowledges it is early innings, investor appetite is climbing. He cited Firefly as the largest space tech IPO in decades, and that markets long closed to space tech brands are now in play.
Small Space Tech Brands Need Path To Contracts
While the defense budget is there for space tech brands, Boggett points out that new-to-market firms and startups with the technology to meet mission needs still need a path to access those dollars. And that path may be through a larger defense brand – which he believes should lead to more M&A momentum in the months and years ahead.
Konert adds that non-traditional contractors – whether they are large firms or startups – must prove they have the team, products and capabilities to scale for Prime contractor opportunities. And DoD must ensure these companies have access as they mature and scale, as there are plenty of early stage funding programs like SIBR, but the going gets tougher when it comes to finding an agency application/customer and securing capital to scale the technology and support these implementations.
Russia-Ukraine Conflict Key Inflection Point
This is something we’ve heard from defense tech brands. The battle domain showed what commercial space could do and helped drive investment and innovation in capabilities that were needed – such as GPS jamming, AI-powered and autonomous drones and broader CUAS.
In an unfortunate conflict, commercial space delivered, but, hopefully, those circumstances will not frequently repeat.
Deep Space Tech Brands Need To Rise Above Noise
Boggett also raised the fact that space tech investment enthusiasm is a blessing, and a challenge. As valuations and investment levels spike, more entrepreneurs gravitate towards the space. That means defense tech brands need to rise above the noise, demonstrate real word functionality and results when it comes to AI and other technology drivers.
Space Tech Brands Can De-Risk By Following Government
Sato dug into inherent risks for commercial space brands when it comes to technology development and investment. They should take advantage of this unique moment in time when Nations and defense agencies are moving forward with space tech as there is more resiliency when things go south. Commercial firms – especially defense tech startups – can be aggressive but patient, Sato says, by observing directional trends
At the same time, public-private partnerships can create shared opportunities and shared risks to provide confidence to all parties in moving forward.
Space Tech PR Can Help Your Brand Stand Out
Recent comments by Seraphim investor Lucas Bishop to Via Satellite affirmed enthusiasm for space tech manufacturing, noting “… a big driver here is re-shoring: governments and industry want greater control and resilience in their supply chains, which is pushing more production capacity back onshore. That’s fueling demand for new manufacturing approaches, both in hardware and in the software that supports design and production.”
The point is this; your space tech brand may have unique attributes with regards to technology, people, customer impact stories, data, supply chain resilience or myriad other differentiators. But unless that enterprise value is communicated your brand will be hard pressed to maximize opportunities for contracts, funding, partnerships, talent acquisition and growth.
For a full list of Defense Tech PR strategies that space technology firms can use to punch above their brand weight, check out my recent blog post “PR for Defense Tech Startups: Driving DoD Deals and Investment.”
And if you are a Space Tech brand interested in learning more about PR and thought leadership as part of your business and marketing strategy, find more information here.
