Space is a timely topic for all leaders, global management consultant McKinsey asserts in a recent report. Today, the space economy is valued at nearly half a trillion dollars and is growing at about 9% annually. Massive technological innovation is creating the opportunity for more capabilities to be deployed above Earth for the benefit of those on Earth. This creates an imperative for executives: if space isn’t part of your strategy, it needs to be. Players in the space ecosystem The four major categories of players in the space ecosystem, according to multinational professional services network Deloitte, are:
However, the space industry is not just about rockets, deep-space exploration and space tourism. Indeed, the combined market share of these segments is “As the impact of digital transformation on the efficiency of the global economy winds down, Furthermore, he continues, rather than “growth at all costs”, the space industry helps to fuel more sustainable economic growth at a time when natural capital costs are moving from policy debate to the companies’ balance sheets. For investors, the 65-year-old and more than €400-billion-b ($427bn) industry offers diversification with limited correlation to a typical portfolio, and exposure to an industry with non- cyclical long-term growth that is well above the wider economy. Before launching the fund, the senior team of NewSpace Capital had a great deal of experience and expertise in space tech and so understood the extraordinary potential of the space ecosystem, Gogulan tells Opalesque. “Speaking only for myself as the founder of the fund, I’m deeply interested in technology that can change the world. Space tech is at the cutting edge - it’s an engine for massive economic and social change.” “We set out to empower our LPs to tap into the growth segment of the €300bn industry that space tech is. Our investments span Earth observation, communication, data analytics, and we aim to give corporates and financial investors the means to hit their net-zero targets and solve globalESG challenges. We are distinct in that we invest in growth-stage companies working to solve fundamental problems.” NewSpace capital NewSpace Capital launched in 2018. In December last year, they announced the first closing of the space-focused growth fund at €105m and the final closing is planned for the end of this year. For now, they have only deployed about 40% of the capital and the value of the assets currently under management is close to €60m. NewSpace adopts a “picks and shovels” investment strategy, that is, it invests in the supply chain and downstream segments of the market. The manager lowers risk by investing in leading companies with existent revenues and a unique market position and supporting management teams that demonstrate vision, clear strategies and a track record of focused execution. “We’ve invested in ICEYE, a world-leading Earth observation satellite business based in Helsinki,” says Gogulan. “ICEYE plays a crucial role in providing valuable Earth observation data and associated services. We also have investments in Kayrros, a global environmental intelligence company which supports, amongst other things, the United Nations and the IEA in tackling methane emissions. And we invested in Cailabs, a deep-tech company enabling revolutionary photonics solutions.” “If we look beyond ourselves, total investment in European space tech in the first quarter of this year reached $1.4bn - up 75% from Q4-2022,” he adds. “The industry that spans Earth observation, communication and data analytics alone is worth about €300bn. If you include everything, that figure grows to €450bn.” NewSpace Capital is based in Luxembourg and was founded by Bogdan Gogulan and Felix von Schubert. Gogulan has more than 20 years of experience in finance and the communication, security and defense industries. Von Schubert has more than 25 years of experience in private equity, technology investment and operations. | ||||
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Horizons: Family Office & Investor Magazine
Space Investing Outside of Rockets, Exploration and Space Tourism |
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