In the last couple of days a trio of industry reports has been released from Euroconsult, Space Capital, and Bryce, sources we track. Here’s a glimpse into each report.
State of the Satellite Industry 2022
- Global revenue of the satellite industry totaled $279 billion USD in 2021, 72% of the space economy.
- A record number of satellites were launched into space in 2021, driven by the deployments of LEO broadband constellations.
- Satellite industry revenue increased 3% in 2021, driven by growth across all segments.
- Technology innovations drove the deployment of more capable, lower-cost satellites, faster throughput speeds, and increased Satcom capacity.
- The availability and quality of commercial satellite imagery improved, along with an increase in provider options.
- Satellite ground equipment revenues also increased, driven by GNSS hardware.
- Launches are becoming more affordable with increased launch activity, launch choices, and rideshare opportunities.
- The U.S. continues to lead the industry in both satellite manufacturing and launch service revenues.
- Satellite servicing is gaining momentum: second commercial life extension mission launched in 2020. Increasing use of innovative post-launch deployment services.
The Q2 2022 Space Investment Quarterly
According to Space Capital in their latest report, “Space technology markets appear to be at a crossroads.”
“On the one hand, current economic headwinds are fierce: inflation has accelerated to 9.1%, and the Fed raised interest rates by 0.75%, with another similar raise expected again this month. With Q1 GDP growth at -1.6% and Q2 expected in two weeks, a technical recession now seems more likely than before. This is putting pressure on equity markets which finished their worst first half in over 50 years. It’s no wonder that companies are not feeling rushed to enter the public markets.”
- With another $6.1B invested into 92 space companies in Q2, there has now been $264.0B of equity investment into 1,727 unique companies in the space economy over the past 10 years.
- While 99% of total investment has gone to Satellites and Launch industries, we are beginning to see founders raise capital and build businesses focused on Stations, Lunar, Logistics, and Industrials. In fact, $2.7 billion has been invested into these Emerging Industries over the past decade, with nearly half of that total invested in 2021 alone. The record level of investment last year was driven by venture capital firms, many of whom were investing in the category for the first time.
- While we believe the macro environment will continue to cause headwinds for some space companies, we do not believe that the space economy is at existential risk.
- We expect the macro environment will disproportionately affect funding for capital-intensive Launch and Emerging Industries companies for the foreseeable future (1-3 years). Companies providing data, insights, and critical services to enterprises and governments will be better situated to grow revenues in the near term and therefore better positioned to raise additional funding.
Prospects for the Small Satellite Market
Euroconsult released its annual Small Satellite Market this week. In it they stating “The market intelligence report, now in its 8th edition, anticipates that about 18,500 smallsats will be launched over 2022-2031, representing about 365 tons per year, i.e., one ton per day to be launched on average over the next ten years. However, the smallsat market presents a growing number of challenges such as high inflation, limited market addressability, difficult profitability, oversupply risk and concentration of the market by a handful of established players.”
“The main driver for continued growth at times of macro-economic uncertainty due to the war in Ukraine, the COVID pandemic, disrupted supply chains, high inflation and central bank monetary policy changes remains NGSO constellations, driven by LEO broadband and Earth observation and the continuous necessity for replenishment launches. Of all smallsats to be launched over 2022-2031, 81% are expected to be part of constellations.”
“The smallsat manufacturing and launch market value will quadruple over the next decade, to $56 billion and $29 billion respectively, driven by the multiplication of constellation projects from both commercial and government stakeholders. Euroconsult has released its updated findings at a time of smallsat mega-factory multiplication in various nations across the world, initiated in the U.S. and China.”
“Flagship examples of low earth orbit (LEO) broadband constellations, such as SpaceX’s Starlink and China’s GuoWang, account for over half (53%) of the projected demand over 2022-2031 in units. Readers are therefore advised to go beyond raw numbers as vertical integration keeps growing with numerous players seeking to manufacture, operate and launch their own smallsats. Significant future market shares are now captive of a region, country or of an integrator and/or launch provider, challenging both commercial satellite integrators and launch providers which see more of their target customers not only leaving their addressable market, but also competing with their own services.”