The disruption of the Space market

During the Christmas night from the 24th to the 25th, a friend of mine was driving at night with her family in the countryside in the center of France. When looking at the sky, she observed a phenomenon that was curious enough to stop by the side of the road and observe it. A series of stars were literally aligned in a very regular pattern and slowly moving in the same direction. In this situation, you don’t need a degree in astrophysics to understand that you’re not looking at something natural. This event took social networks by storm and the same question raised from the North of France down to the South: “does anyone knows what it is ?”  Of course, #Alien and #OVNI (French acronym for UFO) were soon trending on twitter.

Spacelink constellation viewed from the Limoges Countryside, Courtesy of K. Rougier

All these people have been the witness of the first visible signs of a revolution that started not so long ago. We are talking about the disruption of the space market.  This perfect caravan of stars slowly traveling above our head is the first deployment of 60 satellites of the Starlink project proposed by SpaceX founded in 2002 by Elon Musk. The objective is to deliver internet coverage by satellite. And you can imagine that this is just the beginning since the ambition is to launch 12 000 low orbit satellites on 3 levels to compete with the terrestrial coverage. Of course, there is competition with Kuiper from Amazon, Oneweb and others. For the moment, only a few people have observed this kind of constellation. When fully deployed, about 100 of these satellites will be permanently visible in the sky.

During the last 50 years, space programs were run by the government as a demonstration of power and this is still the case when China landed on the moon’s far side in January 2019. However, when space programs have lost momentum, new players entered in the field lead by charismatic entrepreneurs like Elon Musk, Jeff Bezos or Richard Branson.

From a technical standpoint, the low orbit satellites have led to the disruption of the space market. The miniaturization towards nanosatellites drastically reduced the launch cost. Ariane 5 can launch about 1 ton and it costs about 10M€ to launch a large satellite. In comparison, a Nanosatellite weighs only 30kg and the cost launch is in the range of 300k€. When one large satellite does not use all the available mass budget, additional nanosatellites are added to the trip (a kind of “Uber Pool” for space). If you think about it, this revolution really looks like the mainframe computer disruption story, we are talking about high-end technologies used for professional purpose, optimized in a low-cost version to serve unsatisfied needs. The improvement of sensing and data analytics have enabled the ideation of new applications and business models that generated a continuous wave of space start-ups since 2012.

Space tourism is almost anecdotal.  Space start-ups propose to observe the earth and sell images, track fleets of ships or even exploit natural resources. Since the cost of launch is lower, the start-ups are eager to take more risks and become early adopters of technologies that would not be considered as “space-qualified”. It is then a full value chain that is under construction, from component makers to spacecraft providers and constellation operators. Manufacturing in microgravity is also considered for fiber optics, organs, highly homogeneous metal alloys and even meat to feed the future space settlers.  At BLUMORPHO, we source technologies from the top European Research Centers, and many of them have developed recognized expertise in space applications. Hyperspectral imaging technologies as well as Flash Imaging LIDAR (see RemoveDebris) development have been stimulated by European Space programs, and these technologies need often to be degraded and adapted to be used on the earth. But these technologies can also find direct exploitation with new business models. As discussed earlier, the proliferation of satellites is generating the pollution in space. Satellites at the end of life, launchers remain, debris from collision need to be removed from the exploitation orbits, and this can become a business opportunity.

The space conquest has turned into a booming market and has become an accepted investment theme for Venture Capital. This topic has been selected by the INPHO committee and it will be discussed in Bordeaux for the next INPHO Venture Forum that will take place in October 2020.

For more information on this event, you can visit this page which summarises the 2016 edition and the 2018 edition can be found here.

For more information on the Space technologies available from the BLUMORPHO portfolio don’t hesitate to contact me and I’ll be happy to discuss these fascinating developments with you.