The trajectory of investment and spending in the space industry was upended by Russia’s invasion of Ukraine in February, which led governments to recognize that space is a warfighting domain. In April, a mammoth day of contract announcements by Project Kuiper, Amazon’s (NASDAQ: AMZN) low Earth orbit (LEO) satellite system, led pundits to discuss launch scarcity rather than oversupply.
These events alongside numerous smaller significant decisions, drive our selection of the top six connectivity research reports for the first half of 2022, presented in reverse chronological order, with no more than one report per researcher.
1. On-orbit services to generate $4.4B in revenue through 2031
The market for on-orbit services will generate $4.4 billion in cumulative revenues during 2022-2031 — depending on growth in the number of satellites in orbit, according to a report by research firm Euroconsult. The company estimates that only 17,000 satellites will be launched over the next decade, far fewer than alternate estimates of 100,000 or more.
“We do not simply sum all advertised constellations,” Maxime Puteaux, Euroconsult principal advisor and author of the report, told Connectivity Business News. “Our analysis suggests a strong discount. The resulting prediction may be seen as fairly conservative, but looking back at our previous predictions, our margin of error is less than 10%.”
2. Aerospace, defense earnings returned to pre-pandemic levels in 2021
Earnings for aerospace and defense companies returned to pre-pandemic levels in 2021, driven largely by the strength of technology and defense subsectors.
Overall industry company earnings increased 22% in 2021, according to a new report by Capstone Partners. Merger and acquisition activity also returned to pre-pandemic levels with a 50% increase in the number of transactions for the year, according to the report.
3. Space startups raise record $15.4B in 2021, $9B from VCs
Space startups worldwide garnered a record $15.4 billion in 2021 as the number of investment deals increased to 241, up 48% from 2020. However, 2022 may bring a change in that trajectory, as special purpose acquisition company (SPAC) performance declines alongside the economic conditions that fostered earlier growth.
The average deal size in 2021 rose to $64 million, up 35% year over year, according to the “Start-up Space 2022” report released by consulting firm BryceTech.
4. Some space companies see positive impact from war in Ukraine, Russian sanctions
Eighteen percent of space economy companies surveyed by Northern Sky Research (NSR) in late March said they expect a positive impact on their business over the next 12 months, while 54% said they expect a negative impact from the war in Ukraine and subsequent sanctions on Russia.
Among the “several hundred” respondents to the survey, satellite launchers and Earth observation providers had particularly strong reactions — either positive or negative, Brad Grady, NSR president and chief operating officer told Connectivity Business News.
5. $35B in low Earth orbit satellites at risk
Forty-seven insured satellites in LEO have a total insured value of $2.8 billion, but collision risk in LEO threatens at least $35 billion of assets — and that number excludes the International Space Station.
“Collision risk is an important consideration in assessing space risk,” Chris Kunstadter, global head of space at insurer AXA XL, told Connectivity Business News. “Some insurers have withdrawn from LEO, or curtailed their activity, which is not good for the industry,” he added. At most, 8% of assets at risk in LEO are insured, he said.
6. Space sets record investment pace of $46.3B in 2021
De-risking, low interest rates and U.S. leadership led to a bullish 2021 in commercial space with $46.3 billion in investment.
The infrastructure sector had a particularly “massive” year, as it captured some 95% of investment, New York-based venture firm Space Capital announced as part of its Space Investment Quarterly report. The firm defines space infrastructure as hardware and software to build, launch and operate space-based assets.
