NewSpace Ventures – On Trends, Legalities, Ecosystem

I’ve recently stumbled upon a nook of cyberspace aptly named NewSpace Ventures, where space geeks can share and discuss all things NewSpace. Access to its archive of NewSpace companies is provided upon subscription while entry into its private slack channel is invite-only.

On a personal note, the first email from NSV after signup was quite a revelation for me. The archive listed more than a hundred companies spread over 20 countries and offering a myriad of products and services in, for and through Space. I already did have a notion that the global space industry has been rapidly growing, but scrolling through the archive was what made me fathom the scale and potential.

Few of the services offered were beyond my imagination! For instance, the US based Elysium Space offers to turn a loved one’s remains into a shooting star at an interestingly affordable price of $2490. The average North American traditional funeral costs between $7,000 and $10,000

Begin of a short whimsical detour…
Let’s now try to do some back-of-the-envelope calculations around this obviously affordable price. As per the pricelist provided by its launch and mission management services provider Spaceflight (another US based NS company), the launch cost for a 3U cubesat of mass 5 Kg is about $295k. Let’s assume that Elysium would place the remains of several clients in a single satellite which, from the images on its website, appears to be a 3U cubesat. The memorial service also includes the collection of sample, printing of initials & a message, invitation to launch, launch event video, a certificate and also a tracking app whose cost can be considered negligible and ignored for simplicity. Placing about 120 remains on a single satellite would result in a break-even.

A 3U cubesat would weigh less than 4 Kg and at break-even, the 120 ash capsules should together weigh 1 Kg and thereby each about 8g. Of course, the capsules must be much lighter for Eysium to make profits, because we haven’t accounted for the orbit maintenance and re-entry maneuvres. Celestis is another US based company offering a similar memorial service.
End of the whimsical detour.

This daily growing archive lists 329 NewSpace companies as of today. Of them, 155 are from the United States with Germany, Netherlands, Canada, Spain and India contributing more than 10 companies each. Turkey, Malaysia, South Africa, Ukraine, Bulgaria, Austria also each house a couple of private space companies.

After its Türksat 1B in 1994, Turkey now owns several communication and earth observation reconnaissance satellites which were all launched using Chinese, Russian and European launchers, but formation of the Turkish Space Agency is still amidst political turmoil. Here is a nice article on the current space scene in Turkey. The National Space Agency of Malaysia (ANGKASA) was formed in 2002 before which its GEO communication satellites MEASAT-1 & MEASAT-2 designed and built by Boeing were already launched in 1996. Its first microsatellite Tiung SAT developed through technology transfer support from SSTL, UK was already launched in 2000 on the Ukrainean Dnepr. Sunsat-1 was South Africa’s first (university) satellite launched using US rocket in 1999. Read here about a nano-satellite made by SA private industry to be launched from the ISS next year, as part of a European Commission research project.

Evidently, many countries that don’t possess and cannot afford to develop launch capability are slowly but steadily and certainly gaining capability of satellite manufacturing. An important observation is that, most of these countries such as Turkey, Malaysia, South Africa are involving their respective domestic industries to a significant extent in their satellite programs. Given the involvement of globally established satellite makers such as Boeing, SSTL in the form of collaborations and tech transfers, the private industry of these countries is straight away leapfrogging into the latest technology in building satellite components and even complete satellites. Thereby, they can soon gain global competence and can aim to develop and market satellite components and sub-systems. Moreover, if their respective space agencies offer to provide or give subsidized access to satellite AIT facilities which form the major cost in satellite making, these companies will further benefit in terms of cost competitiveness. On the other hand, the private companies of countries such as India that have only been component suppliers for the last five decades will have a disadvantage unless they make their own efforts towards gaining international competence. Given the recent satellite AIT contract to Indian industry consortium and the privatization of PSLV, the Indian industry will now be able to participate at the systems level, but it is already several decades late already. Companies such as Data Patterns, Cyient, Aniara, Centum Electronics, Ananth Technologies and the giants L&T (An overview of L&T – ISRO partnership here), Godrej & Boyce, Tata Motors, Walchandnagar in the spacecraft and launch vehicle domains have been around for decades and some since the inception of the Indian space program. Their major customer in space has always been ISRO and there is no end to end manufacturer of satellites or launch vehicles amongst them. Of course, satellite manufacturing only accounts for  less than 5% of the total space revenues as given in the following chart.

Source: State of the Satellite Industry Report (September 2016)

Obviously, given the small margins, satellite manufacturing can only be lucrative with large volumes. Similarly the revenues from the launch industry are less than 2% of the total space revenues. Therefore, it can be argued that the Indian industries might not have found much value in these areas. However, there is not much business activity from these companies even in the high revenue areas of satellite services and non-satellite industry (human spaceflight, non-orbital spacecraft, government spending). I have summarised the latest issues surrounding the Indian Satcom Scene in this article.

In the least revenue fetching segment of launch vehicles, the NSV lists about 30 companies and another 16 under propulsion which includes satellite propulsion as well. Most of these companies are again from the United States.

About 99% of these companies are currently alive, in that their websites are functional. However, there is no idea how one can attempt to envisage their future. Of course, patents and technology are the main ingredients for their success, but I believe the location of the company plays an equally important role. For a casual space enthusiast checking out the NSV archive, knowing the location would suffice. A company in the US obviously has great chances of procuring funding given its ample VC and HNI money compared to a company in say Ukraine. However, an industry analyst or a serious researcher or a potential investor might prefer to know more details. Towards providing this additional insights, I have taken up the task of including the national legislation relevant to the company’s area of operations in the NSV archive. In the absence of a national law, the applicable international law is mentioned.

A reader might now wonder about

  1. The companies which offer diverse products/services
    Most are early stage startups and operate in a single domain. For instance, Berlin Space Technologies is a Berlin based company offering reliable and cost efficient solutions for high resolution earth observation. They provide small satellite systems, payloads and ground equipment whose sale is regulated by the Foreign Trade and Payments Act of Germany. The apparently diverse range of operations is usually regulated by a single regulation. Similarly Thrustme of France specialises in nano-satellite ion-propulsion and precision attitude control which is regulated under the French Arms Export Control System. If a company in some future time does span across multiple domains, then the company can be listed multiple times.
  2. The companies which might pivot
    Companies don’t pivot overnight and usually at a frequency low enough to allow updation of the archive in time
  3. Updates/Changes in legislation
    Again, legislations don’t get made or updated overnight and usually at a frequency low enough to allow updation of the archive in time

Conducive regulatory environment certainly has a say in the success of a company and in contributing towards its global competence. Especially in the high-tech sector of space with high entry barriers in terms of technology, capital and most times UN/EU/State sanctions given its dual-use nature, these companies often need more than legal clarity alone. Government hand-holding through incubation centers, dedicated (space) SME funds, technology transfers, help in achieving global competitiveness by sustaining them through innovation cycles and offering buyback incentives are few such mechanisms, the information on which I will soon add to the NSV archive.

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