Unicorns in Space? New markets demand new tools

We know it is going to happen because it is already happening: a new space economy generating wealth, jobs and products that benefits all humankind. Morgan Stanley estimates that the global space industry, today at 350 billion USD, will be 1 trillion USD in 2040. From constellations of satellites that deliver internet everywhere to space travel and technologies to mine asteroids, the innovations coming and the pace at which they are coming may look like science fiction but are for real,  powered by startups and visionary entrepreneurs. Make no mistake, this is still a market that requires vast amounts of capital, both in the research and development phase and infrastructure, However, prices and costs are decreasing (e.g reusable rockets and smaller and cheaper satellites). In addition, investors are increasingly looking to space as one of the most promising areas to invest (and no one wants to be late for the party).   

Private investment in space companies hit a new annual record of $10.3 billion USD in 2021, according to a report this week by New York-based firm Space Capital, exceeding the record of $9.8 billion set in 2020, the report said, with nearly a dozen space tech startups that went public in 2021. Over the past 10 years, there has been $231.2B USD of equity investment across 1,654 unique companies in the space economy, led by investment in the U.S. and China, which collectively account for 77% of the global total. Unsurprisingly, we see that some geographies are more active than others. What about Europe? It constitutes only about 10% of that total sum.  

Portugal? 56th in the list, in a total of 66 countries, with roughly 1M USD invested in the last 10 years (2021 numbers). In 2022, this number tripled, thanks to investments made by Armilar in Neuraspace. 

The picture does not change much when it comes to public investment. The US space budget is around US 45 B$, compared to Europe’s 10 B€. One has to understand that these two things are partially connected. 

SpaceX and Blue Origin are certainly great examples of new space private companies backed by the wealth of their founders, Elon Musk and Jeff Bezos. But a closer look at the two companies reveals a more nuanced picture. NASA has awarded SpaceX several contracts over the past two decades, ranging from the development of new spacecraft to transporting cargo to the International Space Station. Under the Commercial Crew program, NASA awarded SpaceX more than $3.1 billion to fund the development of its Crew Dragon capsule. Last year, NASA announced a contract to SpaceX for $2.9 billion to use Starship to take astronauts from lunar orbit to the surface of the moon. As for Blue Origin, their concept of a new commercial space station – Orbital Reef, a “mixed-use business park” in space – has the support of NASA, which will award Blue Origin and its partner companies $130 million USD to develop the space station, which NASA hopes will launch before 2030. 

In fact, for all of the global space champions, the ratio between government customers and commercial customers is still 40/60, with the growth of a commercial business flowing out of “anchor customer” contracts with government users, where the public sector boosts breakthrough innovation by financing high-risk endeavors, which the private sector then operationalizes with great skill and finesse (and pays back in jobs, taxes and GPD growth).  This is what noted economist and government policy advisor Mariana Mazzucato defends in the book The Entrepreneurial State: Debunking Public vs. Private Myths with the role of the public sector in co-creating and directing missions that lead to big innovation, with private sector commercialization a spillover effect (SpaceX has created around 10,000 jobs and generates revenue of over $2 billion USD / year). 

What about Portugal? We definitely need qualified jobs that pay well and are meaningful to retain the talent our universities and polytechnics generate. These jobs will mainly come from the private sector, and the new space private sector has all the characteristics to do this, due to the challenges and innovation that brings. Yes, the entrepreneurs have to come up front, take risks, put their money and of private investors and make it happen. But if we can learn something from the American playbook, is that some anchor customers, in the beginning, can make a huge difference in the end. 

Portugal has a vision for New Space and for the urgent topic of space debris, with Space safety at the core of the strategy of the national space agency, Portugal Space.  This strategy plans to create 1.000 jobs in the space sector by 2030.  

Neuraspace – New markets demand new tools 

The space economy has all the chances to top 1 trillion dollars by 2040. But this growth is threatened by space debris and the growing populations of active assets in space. More than 36,500 objects larger than 10 centimetres and hundreds of millions of smaller pieces exist in Earth’s orbit. This debris can lead to collisions and destruction of operational satellites, causing huge losses to satellite operators and the users of space-based services.  

And if in 2021 there were nearly 6,000 satellites in orbit, in 2030 we will have over 100,000 satellites (15x increase factor) due to the satellite mega-constellations incl. SpaceX/Starlink or OneWeb. This will be a good thing for humanity, with internet for everyone everywhere, but it also increases the chance of collisions. Satellite operators already pay the price, with a deluge of alerts, most of them false, and therefore performing unnecessary manoeuvres.  

Neuraspace is addressing these New Space challenges and opportunities.  Neuraspace aims to solve the issue of space traffic at large and debris specifically by protecting satellites operators from collisions, as well as providing manoeuvring assistance, thereby reducing their operational effort and costs. Furthermore, Neuraspace addresses the liabilities which arise from leaving/generating debris in orbit allowing insurance companies to better price the risk that each satellite is confronted with and poses. Our tool enables the detection of up to 50% more high-risk collisions that have been so far undetected, thus securing space operations, and reducing the need for human intervention up to 2/3 and increases the decision speed. The Neuraspace solution is built on three pillars of i) Data Fusion, ii) AI and Machine Learning and iii) Manoeuvring Automation.  Our innovation revolves around the introduction of AI and ML in ways never done before. We are a global startup from day one, headquartered in Coimbra, with offices in Lisbon and Munich (incubated at Technical University of Munich – TUM Venture Lab Aerospace). Neuraspace raised €2.5m from Armilar Venture Partners in February 2022, has an international experienced team, global customers and partners, incl. the European Space Agency (ESA) and GMV, the 6th-largest industrial group in the European space sector. Despite its short existence, Neuraspace has already been selected by a number of well-established commercial operators for pilots to assess our collision risk estimation and avoidance manoeuvering service. And we want to create 300 highly qualified jobs by 2025. 

Space must remain both a safe and sustainable environment. Space will become a 1 trillion economy. So, there will be a new sustainable space economy and it will have its global champions. Where will they come from?   

We believe one of them will be a Portuguese company called Neuraspace.