The 2022 space economy (1/9/23)

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In today's newsletter:📈 The 2022 space economy 🗺️ Europe’s STM mission🗓️ The week ahead

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Exclusive: Euroconsult Sizes Up the 2022 Space Economy

In its flagship Space Economy Report published this morning, Paris-based Euroconsult finds that the space market grew 8% in 2022. This report is the gold standard for market intelligence on the end-to-end space economy, from upstream manufacturers to downstream service providers and end users.

The space value chain…

…as Euroconsult see is, consists of:

1. Government agencies, which fund R&D and operate space assets

2. The space industry, which builds space subsystems, satellites, and rockets

3. The ground segment, who operates hardware and software to send commands to satellites, downlink data, and more

4. Satellite operators, who serve satcom, navigation, or geospatial data to end users in “packaged solutions”

5. And finally, service providers use these solutions along with other value-added services

For methodological purposes, Euroconsult describes #2 and #3 as upstream players, while #4 and #5 are downstream. And #5—service providers—includes satellite terminal suppliers.

Space market + economy $$$ values

Euroconsult values the 2022 space market at $424B, an 8% year-over-year jump. The space economy—which is all space industry contracts + non-contracted government activity—sat at $464B last year, according to the firm.

Breaking out the data…

• The vast majority of the space market’s value—83%—is captured by downstream players like Uber, smartphone makers, or telcos, which use space-collected data to provide services in some way, shape, or form.

• Euroconsult assesses the “core” space sector—ie, companies that make or own space assets—at $70B in 2022. That’s expected to grow to $100B in 2031.

• The market research firm valued the manufacturing segment in 2022 at $29B, with satellite operators at $16B, launch services at $10B, and ground at $5B. Those sectors are projected to grow to $30B, $30B, $11B, and $5B, respectively, by 2031.

• And 2022 government space spend totaled $103B, according to Euroconsult. That's expected to grow to $124B in 2031.

Macro trends

Supply bottlenecks and inflationary pressures extended into 2022 and continued to negatively impact the space industry throughout the year, with Russia’s invasion of Ukraine adding new pressures and uncertainties for space operators. But the war in eastern Europe also shed new light on the value of space internet and EO services.

From the investor’s POV, Euroconsult writes that “cash is king” now. We saw tons of major M&A deals announced or completed last year, with various satellite sub-industries continuing to consolidate. Investors are looking more favorably on capital-efficient, revenue-generating companies, while rotating “away from uncertain business models and capex-intensive businesses.” And the SPAC boom, of course, became the SPAC bust.

Government space spending

86 nations invested some $103B in space last year (+9% YoY). That’s a new record and an especially notable jump, but Euroconsult expects government space expenditures to stabilize at 1%–2% annual growth starting in 2024.

• Government space spend remains top-heavy, with the top five countries spending 84% of the world total.

• But relatively speaking, it’s not as top-heavy as it once was: In 2000, the top five government space spenders accounted for 93% of the world total.

What to watch for

As Euroconsult first projected in mid-2022, the smallsat sector is in the midst of a hockey stick-like ramp in deployments. The next decade will see an average of 1,704 satellites launched each year from 2022 to 2031. For comparison, an average of 382 was launched annually over the previous decade).

Considering just <500kg satellites, Euroconsult’s analysts say that we’ll lift roughly one ton a day into LEO over the next decade. Let that sink in. But revenue may not scale neatly with satellite deployments or upmass, given increases in the cost of capital and a coming decade that will see intense competition between constellation operators.

Send this to a space analyst, economist, or investor bestie:

Europe Looks to Tackle Space Traffic Management

Neuraspace, Ienai Space, and EnduroSat announced this morning that they have formed a partnership to demonstrate their end-to-end space traffic management (STM) capabilities. The companies say this will be the first European mission dedicated to performing collision avoidance maneuvers.

“I'm really hoping that efforts like our own will help us avoid negative approaches to sustainability and be positive about how we move forward,” Chiara Manfletti, COO of Neuraspace, told Payload.

The mission: The three partners are looking to the second launch of Isar Aerospace’s Spectrum rocket, which is expected to debut sometime this year. Once in space, the companies hope to achieve two main goals:

1. Generate and carry out precise example collision avoidance maneuvers

2. Anticipate and avoid real potential collisions

Each company brings a different mission component to the table. Neuraspace’s AI-driven STM platform will perform collision risk assessments and generate example maneuvers for the mission. Ienai’s electric propulsion system will automatically perform the maneuvers generated by Neuraspace. Finally, EnduroSat is building the satellite bus, which will also host other customer payloads.

The mission itself will last several years, the companies said. At the end of its mission, the satellite will actively deorbit using Ienai’s thrusters.

Register For Our Space Economy Webinar

Global markets are roiled by inflationary pressures, geopolitical disruption, and the risk of a looming recession. What lies ahead for 2023? How will the ongoing economic uncertainty affect fundraising? What are the key trends that will shape the space industry this year?

Hear panelists from a16z, Lux, and Prime Movers Lab address these questions and other pressing issues, in a discussion of 2023 and how space startups can navigate the year ahead.

In Other News

• USSF has decided not to procure weather-data-as-a-service for now because commercially available data doesn’t fill its needs.

• Tianwen-1, China’s Mars orbiter and rover mission, is suffering communication issues.

• China also conducted its first two satellite launches of the year over the weekend.

• Starship won’t launch in January, per Elon Musk, but a late February or March test flight is possible.

• Correction: On Friday, we misspelled Francesco Grilli, Qualcomm’s VP of product management.

The View from Earth