Seraphim Capital publishes a quarterly index which identifies the global VC investment in the space tech domain and have just reviewed the June 30, 2020, figures for the Seraphim Space Index to better understand the impact of the COVID pandemic on the appetite for venture investment in the global space technology domain — please see the graphic below on the outcome for the year/quarter and a more detailed narrative below.
The Q2 2020 total investment was $672 million, including $346 million investment into SpaceX. Compared to Q2 2019, which also included a sizeable $536 million SpaceX investment, the Q2 20 investment saw an increase of 12 percent.
Investment gains across most sub-categories led by a 5 fold increase in constellation investment at $173 million, with Analysis and Product categories up by 191 percent and 31 percent, respectively. Two categories saw declines — Launch and Downlink, both falling by 29 percent to $384 million and $13 million, respectively.
Regionally, US investment was down by 15 percent to $492 million, while investment in Asian companies was buoyant and increased 3 fold to $89 million, followed by European investment up by 68 percent.
Investment across the Early Stages saw a positive increase with Seed up 7 percent, A series 56 percent, B series 35percent, while Growth Stage investments were flat, down by just 1 percent. Capital concentration Q2 2020 versus Q2 2019 were consistent.
After allowing for outliers SpaceX and OneWeb investment, the next top 5 investments in Q2 2020 accounted for 27 percent of all investment versus 32 percent the year earlier. In relation to the top 10 investments, they accounted for 47 percent of total investment across both quarters.
Looking at the rolling full year figures to 30th June 2020 a total of $4.31 billion was invested in the year as compared to $4.07 million in the previous year. Removing associated HAPS/UAV related investments, the space specific headline was $3.16 billion, which was 12 percent down Y-o-Y. This included $846 million Investment into industry bell weather SpaceX versus $809 million the previous year.
From a sector category perspective Launch remained the focus for VC investors, totaling $1.35 billion over the year, up by 7 percent Y-o-Y. Also ahead was investment into companies that undertake analysis of satellite data, which nearly doubled to $235 million. Companies that incorporate satellite data into their products nearly tripled to $464 million. Headline investment into satellite constellations fell by 46 percent to $901m. However, the 2019 data included a $1.25 billion investment in the recently troubled broadband internet startup OneWeb. Removing this as an outlier reveals that the underlying investment into constellations was buoyant, more than doubling the previous years figure.
The hardest hit category was Build, the companies making components and/or building satellites, which fell by 5 percent to $83 million. Regionally, total investment into US based companies fell by 20 percent Y-o-Y to $2.29 billion. However, after removing the OneWeb outlier, US investment actually increased by a healthy 43 percent.
Investors stepped up their commitment to European companies increasing their Y-o-Y investment by 56 percent to $276 million, followed by Asian companies accessing 25 percent more investment across the year, totaling $531 million.
Y-o-Y investment across Early Stage saw a positive increase with Seed up 172 percent, A series 21 percent, B series 55 percent, while C series saw a 5 fold increase to $435 million. At the headline level, growth investment in later stages fell by 51 percent to $1.2 billion; however, again, taking the OneWeb outlier into account, the level of growth staged investment was flat, down by just 2 percent.
Overall the space tech sector has demonstrated resilience in the face of COVID – despite this, the company remains cautious on the overall outlook for VC investment in the sector for the 2H 2020.
Seraphim Capital Space Index information released by the company’s CEO, Mark Boggett.