Riding the Wave of Transformation in the European Space Industry
The European space industry is going through a motion of change. New Space has brought about changes to the way space is ‘done’ across the globe. Industry players have become familiar with the shockwaves companies like SpaceX, Planet and OneWeb have sent through the market: they build, test and launch fast with tremendous success, a wealth of funding and a decline in manufacturing cost. This development has equally brought about optimism and concern among the European industry.
While European space professionals receive money through grants and other ways of funding via the European Commission (Horizon 2020, COSME, ESI Funds), the European Investment Bank Group and European Investment Fund, national ministries and the European Space Agency (ARTES, GTSP and TRP, among many others), there is concern among start-ups in this region regarding the funding available for them.
This is especially true for start-ups that are scaling up to a higher technology readiness level (TRL) and want to move into a commercialisation and growth phase, and move away from institutional money and need to rely more on private investments through seed, equity and debt funding. At this stage, start-ups are dependent on the flourishing initiatives such as the ESA Business Incubator Centres, as well as a small portion of venture capital (VC) funding and the InnovFin Space Equity Pilot (ISEP). As highlighted in the ‘The Future of the European Space Sector‘ report, the European Investment Bank raised the concern that the “investment landscape today is suboptimal and poses a risk for the commercialisation of space technologies in Europe”.
Despite this concern, it is not all doom and gloom. The amount of private funding remains low compared to the US, which is mainly down to cultural differences in the way VC funding is ‘done’ in these regions. The venture capital activity in Europe increased between 2008 and 2017, with a nearly doubled value of deals, although a decline in deals closed. This signals that the EU-based VCs are increasing the value of deals for specific organisations.
There is an abundance of start-ups based in Europe, especially those that serve the small satellite industry. Many start-ups provide particular technologies or services such as advanced propulsion systems, data analysis tools, software development, communication systems, launch vehicles and launch brokerage, among many others. Companies include PLD Space, Exolaunch, Morpheus Space, ThrustMe and Exotrail. Consequently, many downstream service providers are flourishing in this growing industry, including companies such as Open Cosmos, Leaf Space, Astrocast and Earth-I.
Meanwhile, system integrators and (subsystem) suppliers are becoming aware of the changes these new players mean for the industry. Various collaborations and innovation platforms have been established within the European market, including the ArianeWorks project: an innovation platform set up by French space agency CNES and launch vehicle manufacturer ArianeGroup. Other examples include the Airbus BizLab and the establishment of various groups within satellite manufacturer OHB, such as OHB Blue Horizon and LuxSpace.
Space Tech Expo Europe (19-21 November, 2019) in Bremen, Germany brings together government agencies, system integrators, suppliers, SMEs, start-ups and private investors to discuss the future of space in Europe, and what its next steps will be for funding and technology innovation.
View the full agenda here