Future of NewSpace funding & survey of Entrepreneurs

delano.lu v1
source: Delano.lu
On 6 June 2018, EU launched its new space program with a view of streamlining
previous duplicate structures and focusing funding on the space industry and its market development.  One of the emphasis is on satellite data and through the European Commission’s vision of the EU Strategy for Space, members are encouraged to focus on market development of space technologies and services that will inspire new generations of researchers and entrepreneurs through investing 12 billion euros over 2014-2020 to develop high quality projects.  With 33 satellites currently in orbit and over 30 planned in the next 10–15 years, the EU is the largest institutional customer for launch services in Europe.

Access to finance is one of the bottle neck of doing business in NewSpace.  For the first time, the EU Space Programme proposes specific provisions to support `European New Space.`

spacewatch.global v1

source: spacewatch.global


According to recent EIB report, the definition of NewSpace is as follows: a global trend encompassing an emerging investment philosophy and a series of technological advancements leading to the development of a private space industry largely driven by commercial motivations.

Quoting Rapporteur Andres Jaadla (ET/ALDE) : “Space technologies, data and services can support numerous policies and key political priorities, including the competitiveness of the European economy, migration, climate change, the Digital Single Market and sustainable management of natural resources. We must maximise the potential of space data and services for the sustainable development of our cities and regions, through the creation of space hubs and technology incubators for SMEs and by developing new market opportunities and educational programmes to fully exploit the uptake of the space domain”.



A total of €12 billion is set aside for the EU’s three space programmes under the EU’s current long-term budget (2014-2020):

sat v1

source: esa.int

1. Satellite navigation

The Galileo and EGNOS programmes which provide positioning, navigation, and timing information worldwide.


Galileo is Europe’s Global Navigation Satellite System (GNSS), providing improved positioning and timing information with significant positive implications for many European services and users. Global Navigation Satellite System (GNSS) refers to a constellation of satellites providing signals from space that transmit positioning and timing data. The receivers then use this data to determine location. By definition, GNSS provides global coverage. Examples of GNSS include Europe’s Galileo , the USA’s NAVSTAR Global Positioning System (GPS), Russia’s GLONASS and China’s BeiDou Navigation Satellite System.

The European Geostationary Navigation Overlay Service (EGNOS) is the first pan-Europe navigation system and it augments the US GPS satellite navigation system and makes it suitable for safety critical applications such as ship navigation or airflight flights through narrow channels.


source: Gallileo-nav.com


The EGNOS Open Service was available since 1 October 2009 and EGNOS positioning data are freely available in Europen through satellite signals and for anyone equipped with an EGNOS enabled GPS receiver.

The EGNOS Safety of Live service was launched for aviation on 2 March 2011 which is a space-based navigation signal that has become usable for safety-critical tasks of guiding aircraft.


2. Earth observation

The Copernicus programme which provides Earth observation data and information.

Copernicus is the European Union’s Earth Observation Programme, looking at our planet and its environment for the ultimate benefit of all European citizens. It offers information services based on satellite Earth Observation and in situ (non-space) data. The information provided by the Copernicus services can be used by end users for a wide range of applications in a variety of areas. These include urban area management, sustainable development and nature protection, regional and local planning, agriculture, forestry and fisheries, health, civil protection, infrastructure, transport and mobility, as well as tourism.

The Copernicus programme is coordinated and managed by the European Commission whilst the development of the observation and space infrastructure is with the European Space Agency, European Environment Agency and the Member States for the in situ components.

a esa sat v1

source: esa.int

3. Space research

Part of the Horizon 2020 programme, it focuses specifically on space technologies, applications (e.g. GNSS and Earth observation), weather, sciences, exploration, and other space related topics.

According to Horizon2020, the European Investment Bank Vice-President Fayolle and Commissioner Bienkowska took the opportunity of the 11th Conference on European Space Policy to present the report on ‘The Future of the European Space sector.’  This report, jointly produced by the European Commission- EIB initiatives InnoFin ADvisory and European Investment Advisory Hub, assessing the current investment space sector landscape and identifies gaps in financing and with recommendations.


gsa.europe.eu v1

source: gsa.europe.eu

Transformation in space sector

Key points from EIB report:

  • Newspace attracted EUR 14.8 billion in investments and is picking up
  • Since 2000, over 180 angel and venture backed space companies formed
  • VCs represent the majority of investors in space companies, currently at 46%
  • Angel and VC investors combined make around 66% in space companies
  • US based investors account for around 66% worldwide investors
  • Satellite services represent the largest sector -around37%

Key risks:

  • High upfront investments
  • Immature markets
  • High technological uncertainty
  • Regulatory uncertainty


  • Despite European firms remaining competitive and developing innovations such as micro and nanoelectronics, digital transformation, convergence, optical and ubiquitous communications, this trend has rarely resulted into commercial advantage within the space sector.Reasons?
  • Lack of upstream activities in EU, also US firms dominate the upstream sector.
  • Ineffective Technology Transfer
  • Capital Funds in limited supply
  • Scarcity of scaling up funding


theverge v1

source: theverge.com

Funding landscape

In the EIB report, 40 space companies were interviewed and 40% of the interviewees notesd that public funding was a precondition for accessing private risk capital.

It is noted that new programmes such as Horizon Europe and InvestEU will build on the success of Horizon2020 and the European Fund for Strategic Investments )EFSI which is primarily used for reserach and innovation.

An observation according to the report is whilst funding is available for European Space Agency (ESA) Business Incubator and Acceleration Centres and the Copernicus Start-Up Programme it was felt that the early stage investments were small and rather fragmented, with only specific space segments adequately covered.

It is also noted that total volume of investment lags far behind private investments in the US, specifically private funding for early stage and growth phases.

According to the EIB report, `the investment landscape today is suboptimal and poses a risk for the commercialistion of space technologies in Europe.`

naharnet.com v1

source: naharnet.com


Key findings from EIB report  in relation to financing challenges:

1. The European space sector experiences funding hurdles similar to those of other tech companies, particularly at scale-up phase:
• Not only is the volume of European VC investment lower, venture capitalists invest with smaller tickets, and growth capital is particularly hard to find
• Business loans from commercial banks are nearly inaccessible

2. Companies in both the upstream and downstream sectors of the industry
struggle with access to finance, but for different reasons:
• Upstream companies face long development cycles, are capital-intensive and operate in a limited market with many business risks
• Downstream companies sell to emerging markets (with predominantly
governmental buyers) and to unsophisticated customers

3. The space ecosystem lacks investors with a space background and space
investment expertise:
• It will still take years for the European space sector to exploit the full potential of the mobility of people between the triangle of corporate, entrepreneurship and investment roles

4. European space entrepreneurs feel there is a lack of private financing
sources and keep an eye on the US:
• Most space entrepreneurs are looking for private capital outside of the EU
• The wave of NewSpace investments in the US, with larger funding rounds and investors with greater risk appetite, are enticing to European firms


Key findings from EIB report  in relation to market maturity and sector risks:

5. Space innovations have a longer development cycle than general tech
• The space hardware development cycle is considerably longer than in general tech; however, NewSpace is closing the gap

6. Investors are mostly concerned by market maturity
• Immature markets with questionable demand, technology risks and high capital needs are the key risks from the perspective of space investors

7. Investors do not see the exit opportunity (yet)
• Large system integrators do not yet have a tradition to invest in external
• Investors perceive the lack of exits as a sign of new or failing markets and
therefore a risk for financial returns

8.  The lack of follow-on finance has led to a number of early initial public offerings (IPOs)
• Europe has seen a few small space IPOs over the last two years despite a decline in the overall small IPO market
• IPOs are seen by the entrepreneurs as a sizable funding source but also as a scalable funding source


space.com v1

source: esa.int


Role of the public sector

9.  European public innovation instruments play an important role in
unlocking private capital for the space sector
• 40 % of the companies seek public funding as it is a precondition for private investment
• Public funding serves as a seal of approval in the market

10. The landscape of space sector support mechanisms is rather fragmented, and procurement is geared towards the traditional value chain
• Entrepreneurs find it hard to navigate through the different possible funding options
• The traditional European upstream space industry is used to a large institutional
market of traditional public procurement and R&D grant programmes
• Industry associations and entrepreneurs in both the upstream and downstream sectors indicate a lack of public anchor tenants to stimulate the sector

11.  Public authorities around the globe are stimulating the setting-up of venture capital funds dedicated to the space industry
• France, Luxembourg and Japan are examples of governments initiating VC funds to bridge the funding gap for space companies

aspace v1

source: medium

Key Recommendations from EIB report



1. Strengthen the ecosystem of public support mechanisms by introducing more flexibility and more commercial orientation


2.  Develop and deploy innovative pull mechanisms from the
public sector (e.g. innovative procurement and industrial
policies) to stimulate technology development and its
commercial uptake

3. Adopt a strengthened European defence policy as a
driver for market development across all space business


4.  Increase the volume of risk capital and catalyse additional private investment into the sector


5. Establish a ”finance for space“ forum with representatives from the finance community, academia, policymakers and industry
to bridge the information gap and develop innovative financing solutions for the space sector.

Details of the EIB report can be found here


Here is my take on the summary of the EIB report for entrepreneurs:

1. Think of the customers

What I am about to write is counter intuitive.  Think of the customers and think what the customers want and start selling to them.  If the focus is purely on the funding aspect from VCs and Angel Investors or Government, that is not going to ever be enough in any event for the long term.

2. Diversify

So you have any amazing business plan to extract water from the Moon, to mine asteroids and to save the world with your technology.  Only problem is it will take 10 to 15 years to realistically pull it off.  What do you do in the meantime?

Diversity and think what else can your business be doing in line with your values to make the business work.  I am not for a moment suggesting giving up, but rather give the time and space for diversification and building on that customer relationship.

I had an interesting conversation about cheese with a colleague.  His market is working on selling cheese in Japan.  The thing is Hello Kitty and strawberry cheese rocks.  If one does not exercise flexibility in any given market, or heed to what the customer wants, their cheese business may not workout long term.

3. Positive energy

This one is probably one of the more important ones.  I have worked with startups that failed before it even took off.  It was negative thinking, pessimism and lack of imagination.  I would invite entrepreneurs to meditate on success and what failure looks like at the outset and sit with it.  Sit with it knowing full well you have the tools and resources to turn it around.  As they say, we have plans and plans are made to be changed.

4.  Learn from others

What are the success stories out there that are worth learning?  A leader once said to me, doing the things you do not want, is probably one of the best things they learnt about being a leader.  This marries with balancing our values and perhaps even asking ourselves if I was in X, Y, Z`s position, what would I have done?

asatellitetoday.com v1

source: satellitetoday.com


What is your view on funding on NewSpace?

What does it take to be a successful NewSpace startup/entrepreneurs?

Send your thoughts to newspace2060@gmail.com




Written by Helen Tung
Emergent Tech Advisor/MINERVA Fellow
EU- Japan Centre
#EIB #NewSpace2060  @EUJapanCentre


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