Space Tech Sees a Funding Surge
For investors, the final frontier of space is once again proving to be a popular destination. Despite economic headwinds, space tech startups are experiencing robust funding, nearly reaching last year’s venture funding total only two-thirds into the year, per Crunchbase data.
Funding to venture capital-backed space tech startups has nearly reached $6 billion this year. In comparison, space travel, satellite communication and aerospace startups raised a total of $6.2 billion for all of last year, which was the second consecutive down year after a record $12.3 billion in 2021.
Notably, the recent $40 million Series A round for Huntington Beach, California-based asteroid mining startup AstroForge, led by Nova Threshold, highlights this trend. Though not a massive funding event, it adds to a series of good-sized investments in the sector.
Anduril Industries’ Impact
A significant factor in the robust funding numbers is the Costa Mesa, California-based defense tech firm Anduril Industries, which falls into the space tech category due to its aerospace operations and use by the U.S. Space Force. Its $1.5 billion Series F round last month considerably boosted the overall funding figures (Anduril’s $1.5 billion Series E in late 2022 is also included in that year’s space tech funding).
Other Major Funding Rounds
Beyond Anduril, several other large rounds have propelled the sector:
- Astranis: Raised a fresh $200 million round in July to build out its Omega satellite program. The round was co-led by Andreessen Horowitz and Bam Elevate. (Astranis raised a $200 million round at a $1.6 billion valuation in April 2023)
- Apex: Secured a $95 million Series B led by XYZ Venture Capital and CRV in June to scale up production of satellite buses, which are the main structural components of satellites.
- Hadrian: Announced a $117 million Series B, including $25 million in debt, in January. RTX Ventures and a16z participated.
China’s Growing Presence
Interestingly, five of the top seven rounds raised by space tech startups this year have gone to Chinese firms, including companies like Yuanxin Satellite, Tianbing Technology and Deep Blue Aerospace, all of which have raised over $100 million. This comes despite a challenging venture market in China due to government regulations and rising political tensions with the West. Total funding to startups in China fell to $7.4 billion in Q2, a 42% decline from Q1, which saw $12.8 billion invested.
Ties to Defense Tech
The increasing venture dollars in the sector isn’t entirely surprising, especially when considering the close relationship with defense tech, which has also seen a surge. Venture funding for defense tech startups is on track to set new records this year. So far in 2024, startups in the sector have raised $2.5 billion—nearly matching the record of $2.6 billion set in 2022. While not all space tech startups are defense-related, there is significant overlap, and defense tech’s success often correlates with space tech funding.
