Investing in Space: Industry Enters New Era with Tight Funding and SpaceX Dominance

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I’m concluding my time at the World Satellite Business Week conference, after a busy schedule of panels, meetings, and more. Paris, as beautiful as always, provided insights from both familiar and new sources. I could spend the rest of the year writing about everything I learned here.

My main takeaway: The “bon temps,” good times, are over – at least in terms of easy access to capital and a less competitive landscape. However, it doesn’t necessarily mean that bad times lie ahead for the space sector. The competition is intense, and investors expect higher returns on their investments. Therefore, companies need to focus on executing and delivering results.

Three key themes emerged from conversations: SpaceX is the dominant player, recent satellite malfunctions have put significant pressure on the insurance market, and space companies are facing challenges when it comes to raising funds.

1. Dominance of SpaceX

SpaceX’s influence and dominance were hot topics of discussion, whether it’s in the launch market or the satellite communications industry. SpaceX, often seen as the bogeyman, commands both respect and envy. The introduction of SpaceX’s Starlink has disrupted the multi-billion dollar satellite communications landscape, which had been dominated by a few major incumbents for many years. Additionally, SpaceX’s Falcon rockets have become the primary choice for most customers seeking to launch their satellites, except for those small enough to be accommodated by Rocket Lab’s Electron. The satellite industry eagerly awaits the entry of next-generation large rockets to provide some competition for Falcon. However, SpaceX has made it clear that they are willing to launch even their competitors’ satellites.

2. Challenges in the Insurance Market

The discussion also focused on the implications of Viasat’s satellite malfunctions on the insurance market. While Viasat has yet to file any claims, the potential losses have created concerns. The CFOs of Redwire, BlackSky, and Rocket Lab shared their insights on the situation during a panel discussion:

“There’s only so much capacity in the space market … just like any non-standard type of insurance product, they need to earn a certain amount of money over time … the whole market’s roughly a $750 million [a year] premium market, they’ve now got about a billion dollars of possible losses … can they actually make it up in the future, and is there enough high-value assets to insure? Because I think the one issue that creates dysfunction in this insurance market is … do you have enough volume to make up for this loss? And the answer is no, right now. … They’re trying to figure out what 2024 is going to hold.” – Redwire CFO Jonathan Baliff

“Also, a lot depends on the size of the placement that you’re looking for … given the size of our current satellites, they’re in the neighborhood of about $10 to $12 million, the interest rates are going up and the insurance premium will likely go up at least in the near term … if you’re trying to place 10 to 12 to 15, you probably have a better situation than if you’re trying to place like half a billion or something like that.” – BlackSky CFO Henry Dubois

“In the launch insurance market… our costs have come down, as we now have 40 Electron launches, so it’s a matter of getting that heritage behind you.” – Rocket Lab CFO Adam Spice

3. Funding Challenges

EXIM’s announcement that it is processing over $5 billion in space-related financing brought attention to the funding landscape. The U.S. export credit agency is keen to support space projects and has opened the door for more companies to seek funding. Notably, EXIM aims to back U.S. projects and reduce reliance on non-American firms. Interestingly, some of the largest deals in the sector recently were executed by non-American companies. This summer has been filled with an abundance of space news, making it an exciting time to be a space reporter. The industry is experiencing progress, challenges, and significant dealmaking, which shows no signs of slowing down. If you have any tips or information, feel free to reach out via encrypted means, such as CNBC’s Signal number or my Proton email. Au revoir from another fantastic WSBW!

• SES and Starlink partnering to offer combined service: The partnership will begin with the cruise operator market. SES CEO Ruy Pinto emphasized that “there is unmet demand that neither of us, by ourselves, can provide to certain cruise customers,” and mentioned that the companies plan to expand their joint offering to other markets. – CNBC
• SpaceX no longer subsidizing Starlink antennas: According to VP Jonathan Hofeller, the company has made significant improvements to its terminal production, eliminating the need for subsidies. – CNBC
• FAA chief optimistic about giving Starship launch license in October: Acting FAA Administrator Polly Trottenbergh expressed confidence in issuing the license to SpaceX next month, highlighting the positive working relationship between the agency and SpaceX. – Reuters
• Concerns over SpaceX’s launch market dominance: Different opinions were voiced at conferences on both sides of the Atlantic. Air Force Secretary Frank Kendall expressed no concerns about SpaceX’s majority share of the global launch market, while Lazard Managing Director Vikram Nidamaluri sees it as a significant concern for the commercial side of the industry. – CNBC / SpaceNews
• NASA acknowledges the unaffordability of SLS rocket: Senior officials at NASA admitted that the giant moon rocket currently lacks cost performance measures over time and lacks transparency. – GAO
• ULA launches second mission of the year: The Atlas V rocket carried the SILENTBARKER mission for the NRO and U.S. Space Force, aiming to enhance the U.S. capability to track and inspect other spacecraft in orbit. – ULA / NRO
• SpaceX launches 64th mission of the year: A Falcon 9 rocket launched 21 Starlink satellites into orbit from California. This was the 11th flight of that Falcon 9 booster. – SpaceflightNow
• Terran Orbital opens California facility expansion: The expansion adds 60,000 square feet of manufacturing space, increasing the company’s satellite production capability to more than 20 satellites per month. – Terran Orbital
• DLA Piper announces space practice: The law firm established a space practice group led by Christian Ford, who stated that DLA Piper is committed to helping commercial space companies succeed amidst the industry’s promising future. – DLA Piper
• Axiom’s third mission to include European customers: Italy, Turkey, and Sweden will have astronauts flying to the International Space Station in the Ax-3 flight, which is set to launch in January and is facilitated by the European Space Agency. – Axiom
• Germany to sign Artemis Accords: Germany is the latest nation to join the cooperative space agreement led by the U.S. – SpacePolicyOnline
• Rocket Lab tests Neutron upper stage tank: The company is preparing to test a Stage 2 tank to ensure its structural integrity. – Read more
• Blue Origin plans New Shepard’s return to flight: The suborbital rocket, which has been grounded since a launch failure a year ago, is targeted for an early return to flight next month. – Ars Technica
• NASA astronaut Frank Rubio sets U.S. record for time in space: He surpassed the previous record by spending more than 255 days on a space mission. – collectSPACE

• Telesat buys 14 launches from SpaceX: The Falcon 9 missions are intended for Telesat’s Lightspeed satellite internet constellation and will begin in 2026. – CNBC
• Leidos orders four more Rocket Lab HASTE missions: Following the successful launch of the first HASTE mission, Leidos has decided to purchase more of the hypersonic rocket variant. – Rocket Lab
• Ball Aerospace awarded $486.9 million NASA contract: The contract is for building a hyperspectral infrared instrument for NOAA’s Geostationary Extended Observations satellite program. – NASA
• Firefly receives $18 million NASA lunar contract: Firefly will provide “radio frequency calibration services” for the agency’s LuSEE-Night radio telescope during the second Blue Ghost mission scheduled for 2026. – Firefly Aerospace
• Relativity expands at NASA’s Stennis center: Relativity has leased the A-2 vertical rocket engine test stand in Mississippi as part of its ongoing expansion plans, which involve a $267 million investment at Stennis. – Relativity
• SWISSto12 raises $28 million in debt: UBS has provided the debt financing to support SWISSto12’s satellite manufacturing expansion. – SWISSto12
• Momentus raises $5 million: The funds were raised through a direct ‘at the market’ offering. – Momentus
• Satellogic and SkyWatch join forces: Satellogic’s satellite imagery will be integrated into SkyWatch’s EarthCache platform. – SkyWatch
• Thaicom selects Airbus to build geostationary satellite: Eutelsat, a French operator, has agreed to lease half of the Thai satellite’s capacity over Asia. – SpaceNews
• Intelsat teams up with Arianespace for satellite launch: The IS-45 satellite will be launched on an Ariane 6 rocket. – Arianespace

• Planet lowers annual forecast: Planet revised its fiscal year 2024 revenue outlook to $216 million to $223 million, representing about 15% year-over-year growth. This is a decrease from the previously forecasted range of $248 million to $268 million in revenue with approximately 35% year-over-year growth. – Planet
• Roth Capital rates Redwire as a buy: The investment firm set a $10 price target for Redwire, suggesting the stock could more than triple in value within the next year. – CNBC
• Astra performs reverse stock split: Astra’s 1-for-15 reverse stock split was implemented to avoid a potential Nasdaq delisting. Following the split, shares traded between $2 and $3, after being near 20 cents previously. – Astra

• Rob Rainhart appointed as President of HawkEye 360: Previously serving as the company’s COO since 2019, Rob Rainhart now takes on the role of President at HawkEye 360. – HawkEye 360
• Space & Satellite Professionals International (SSPI) recognizes ’20 under 35′ young professionals: The SSPI acknowledges the excellence of young employees and entrepreneurs in the space sector. – SSPI

• Sept. 14: Firefly’s Alpha launches VICTUS NOX mission for the Space Force from California.
• Sept. 15: SpaceX’s Falcon 9 launches Starlink satellites from Florida.
• Sept. 15: Russia’s Soyuz launches the MS-24 crew mission from Kazakhstan.
• Sept. 19: Rocket Lab’s Electron launches Capella satellites from New Zealand.
• Sept. 19: SpaceX’s Falcon 9 launches Starlink satellites from Florida.

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