Research and analysis

Executive summary: Expanding frontiers

Published 16 May 2023

1. Space already has a critical role in our global economy.

Think ‘space industry’, and you might be forgiven for thinking of astronauts, rocket launches and the tourism ventures of billionaires. It is less recognised for its significant role as the ‘hidden utility’ underpinning our daily lives and economy, supporting an estimated £370bn (~18%) of UK GDP every year.

The economic contribution of space internationally is predominately driven by around 5,000 active satellites. helping to tackle some of our greatest global challenges - including the transition to a low carbon economy, digitisation of industries, tackling food insecurity and alleviating pressure for future mobility solutions. Services such as satellite communications and connectivity, a renowned UK strength, are key to addressing these.

2. Disruption and innovation continues to unlock vibrant commercial space enterprise

Technology advances in satellite manufacturing and rocket launch have dramatically lowered the barriers to accessing space, enabling companies to exploit an increasingly diverse range of economic sectors with space-derived data, applications and services.

By 2030, an estimated 100,000 satellites could be operational, increasing the impact of the sector. Longer term, innovation is also unlocking completely novel ‘in-orbit’ commercial markets, including debris removal, satellite servicing or solar power generation.

3. The sector’s growth trajectory is expected to accelerate

The global space sector is worth over $469bn, with 77% accounted for by the commercial market. Analysts project future growth of up to 11% per annum, with some segments such as earth observation, satellite communications and connectivity forecasted to grow even faster.

4. Significant capital has been attracted across a diverse range of investable segments

In total, over $47bn of private capital has been invested across the global space sector since 2015, growing on average 21% per year. The UK has been a key hotspot, receiving 17% of this inflow, making it the second most attractive destination - only behind the US.

This capital was deployed into more than 600 companies operating across three stages of the space value chain, which helps to highlight the diverse ecosystem of companies and business models of the sector:

• Upstream: Spacecraft manufacturing and launch vehicles.$22.6bn deployed across 210 companies

• Midstream: Spacecraft operations and in-orbit management. $5.6bn deployed across 152 companies.

• Downstream: Spacecraft-derived data, applications and services. $19.6bn deployed across 267 companies in three primary areas: earth observation (EO), satellite communications and connectivity (SatCom), and satellite position, navigation & timing (PNT).

Despite only 56% of space investments in 2015 being made in revenue-generative companies, it reached 95% in 2022, demonstrating the growing maturity of the sector.

5. The investor base is rapidly expanding and diversifying

Whilst from our experience some perceive space as a market just for specialist investors, capital from across the investor spectrum has targeted the sector:

• The number of unique investors into space companies grew from 274 to 558 between 2020 and 2022.

• At the peak of space investing in 2021, 63% of all space investors were new to the sector.

• 13 of the largest 15 venture capital firms and 8 of the largest 15 private equity firms in the world have invested in space sector companies.

• 64% of corporate investment into the space sector came from non-aerospace and defence companies in 2022 – with increasing interest across technology, telecommunications, media, financial and automotive sectors among others.

The growing investor base is also contributing to the prevalence of exit opportunities, with 163 space sector exit events since 2015 through private and public markets. This includes several megadeals being announced in 2022 including OneWeb, Inmarsat and Maxar.

6. The UK space sector offers an attractive ecosystem for space companies and investors

The UK has a rich heritage of commercial space innovation and hosts a dynamic industrial base of over 1,500 space companies, taking advantage of the UK’s talent pool, world leading infrastructure and access to export markets.

The UK Government recognises both the economic potential of the space sector and its strategic importance to society, and as such is investing in key space technologies and applications to reduce technical and business risk.

The UK space sector continues to be open for business and welcomes continued engagement with investors across the UK and overseas who are exploring opportunities to deploy capital across this dynamic and fast-growing market.

7. Global space sector

• $469 bn market size of the global space sector.

• Up to 11% annual growth forecasted by analysts for the space sector to 2030.

• 77% commercial share of the space sector vs. Government programmes.

• 60,000 - 100,000 satellites estimated by 2030 vs. 11,000 launched in the past 60 years.

• $47.8bn private investment since 2015 across over 600 companies.

• 95% of space sector companies were revenue generative that received investment in 2022 vs. 56% in 2015.

• 63%of investors were ‘first-timers’ in the sector during the investment peak in 2021.

• 80%of space investment driven by VC firms in 2022, who have made over 1,000 deals since 2015.

• 163 disclosed exits from private space investments since 2015.

8. UK space sector

• 1st UK National Space Strategy published in 2021, to “build one of the most innovative and attractive space economies in the world”.

• 2nd leading investment destination of private space capital since 2015 with a 17% share, behind only the US.

• £17.5bn domestic revenue accounting for a ~5% share of the global space sector.

• 18% UK GDP underpinned by space, driven by space-derived data, applications and services.

• 1 global producer of top-cited space research, with over 50 UK universities having active space science functions.

• 1,590 UK space companies operating in the UK space sector across the end-to-end value chain.