Valley of death (12/2/22)

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In today's newsletter:🚀 ESA CM22 breakdown💸 Strategic Capital💫 Payload's picks

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Breaking Down ESA's New Budget

‘Twas a busy time in Paris last week. The European Space Agency announced a new cohort of astronauts and announced a budget of €16.9B for the next three years. ESA announced the latter after Council at Ministerial level talks in Paris from Nov. 22 to 23.

The sum falls short of the €18.5B requested by the agency, but still represents a 17% increase over the prior period. Lots of 17s last week:

The 17% funding boost represents the largest budget the agency has ever had since its founding in 1975. The funding boost—kicked in by 22 member states, with ~70% coming from Germany, France, Italy, and the UK—stands against the backdrop of inflation, high energy prices, a choppy macroenvironment, and the war in Ukraine.

ESA celebrated the hard-fought budget, saying it will bolster the continent’s autonomy and leadership in space. “Climate and sustainability will remain ESA’s highest priority, our science and exploration will inspire the next generation, and we shall build a place where European space entrepreneurs thrive,” ESA Director General Josef Aschbacher said.

The funding boost is also rooted in geopolitical considerations. For obvious reasons, ESA is no longer working with Roscosmos and Soyuz rockets aren't flying its payloads.

Last month, Aschbacher told AFP that Europe risks “falling out of the race” with Washington and Beijing if it did not continue investing in its space priorities. "At the end of these discussions, there must be a single Europe, a single European space policy, and unfailing unity in the face of Chinese ambitions and American ambitions," France's economy minister Bruno Le Maire said last week in Paris.

What's being funded?

Among other things, a European connectivity constellation and the Rosalind Franklin rover’s mission to Mars were funded. So was Moonlight, an ESA initiative encouraging European industry to deploy constellations of communications and navigation satellites into a lunar orbit.

Here’s a breakdown by category (in $M, converted on Thursday, Dec. 1):

The Office of Strategic Capital

The Pentagon is getting into investing. Yesterday, Secretary of Defense Lloyd Austin established a new Office of Strategic Capital (OSC), which aims to give the DoD the ability to work more closely with private capital.

Why get into capital markets?

Right now, the DoD’s mechanisms for helping new, important technologies hop the “valley of death” between development and commercial viability are acquisition-based.

The OSC, on the other hand, would allow the Pentagon to use loans and loan guarantees to help young tech companies meet their capital needs.

“America's strategic competitors are working to influence U.S. technological innovation to their advantage," Under Secretary of Defense for Research and Engineering Heidi Shyu said in a statement. "OSC is part of a broader administration-wide effort to ‘crowd-in' private capital in areas where our efforts can boost our future security and prosperity."

The Pentagon is hoping to begin closing deals by early 2023.

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In Other News

• Orion has kicked off its journey back to Earth.

• The FCC authorized SpaceX to launch up to 7,500 V2 Starlink satellites.

• Rocket Lab ($RKLB) created a US national security subsidiary.

• “Amelia Earhart”—the sixth of ten space-bound GPS III satellites—is being prepped for a January launch.

The View from Space