Space tech set to accelerate the pace of innovation

Bogdan Gogulan at NewSpace Capital explains how renewed investor interest in Europe’s start-ups will transform space tech

Europe is a paradoxical place. It’s both very homogeneous and very heterogeneous. It has a rich shared history informed by ancient civilizations like the Greeks and Romans, and influenced by the spread of Christianity, the Renaissance, the Enlightenment, and the two World Wars. On the other hand, it’s home to a vast array of cultural practices, customs, traditions, and, of course, languages, including Romance, Germanic, Slavic, Finno-Ugric, and other linguistic families – to say nothing of regional dialects.

It’s because of this that Europe has long been a crucible for innovation, contributing massively to the world’s storehouse of knowledge and technology. And technology, in the last few decades, has been the operative word: the continent has produced countless tech entrepreneurs, start-ups, and networks, which have made Europe a vibrant and exciting ecosystem to be in.

These entrepreneurs and start-ups, as well as the growth-stage companies that start-ups have matured into, have depended in many cases on investors to give them the financial fuel to do their jobs brilliantly.

But the chaos of the last few years, with COVID-19 sweeping across the world, war breaking out in Ukraine, and an emotional climate of anxiety subsequently developing, hit investor confidence hard.

Finally, the tide is turning. There’s been a real surge in investor enthusiasm about the European tech sector of late, which bodes well for innovation and growth across the continent and elsewhere. Within that sector, one area of particular interest will be space technology, which is fast becoming the backbone of the global economy.

Indeed, it underpins, enables, or overlaps with so many areas of life that it wouldn’t be too much of a stretch to say that soon, every company will, in a sense, be a ‘space company’. Everyday tasks like finding your way to a restaurant you haven’t visited before, surfing the Internet, checking the weather forecast, or getting an Amazon delivery would be very different if satellites didn’t exist.

But what makes satellites so exciting now – and what makes this a real hinge moment for the space tech sector – is the way that they are tackling massive problems that exist at the global level.

Take the climate crisis. Earth observation – the collection, analysis, and distribution of information about the planet drawn from satellites – is helping us monitor emissions, floods, fires, and overall progress towards net zero. That data can inform the creation of climate policy, reveal instances of greenwashing, and give private companies a far more accurate understanding of their sustainability profile.

Space tech is also helping us to eliminate inefficiencies, bring down costs, and push up productivity rates, which have lagged in the eurozone for years, especially compared to its friends across the Atlantic. And it’s being used in conflict zones, too, in the form of highly secure and resilient space-to-earth communication via laser, to transmit data in a way that doesn’t make it vulnerable to interception.

Despite the widespread applications of space tech, and the vital need for those applications, space tech companies have struggled in the past to secure the necessary funding to transition from the research and development stage to full-scale operations and commercialisation. Lack of capital has had an enormous limiting effect, preventing space tech companies from achieving significant breakthroughs and competing on a global scale – to the benefit of all of us.

That’s why renewed investor interest in Europe’s start-up ecosystem is so exciting. With capital now beginning to flow freely into the sector, space tech companies are set to accelerate their pace of innovation, scale operations, advance research and development, and commercialise.

This is about moving from prototype to production, and from production to mass production. It’s about getting European space tech to the stage where it can contribute technologically, socially, and economically to its fullest potential.

Though investor confidence is rising, the scars received in the last few years are still fresh. There is still some caution to overcome. The case for space will have to be made if that area of the tech ecosystem is really to flourish and investment is to keep coming in irrespective of conditions which are liable to be volatile for some time. Because of the nature of space tech, investment in it helps Europe to ride out that volatility and withstand shocks, especially those caused by the changing climate, which (as record-breaking temperatures in May made clear) continues to get hotter.

For now, the mood among investors is optimistic, and that’s good news for everyone. With generous and sustained investment over time, innovative companies can emerge, grow, and scale, and we can anticipate a real leap forward for technology and wider society.

Bogdan Gogulan is CEO and Managing Partner at space-focused private equity firm NewSpace Capital

Main image courtesy of iStockPhoto.com and Inok