Last year was a record-setting year for investment in space start-ups.
Start-up space companies attracted more than $15 billion in total financing during 2021, shattering the $7.7 billion record set in 2020. The number of recipients and deals both increased nearly 50%, while the average deal size grew 35%.
The significant increase in investment was driven by several trends including:
- The continuation of large amounts of private capital into start-up space ventures (especially from larger and more frequent late-stage investments). Venture capital investment grew 82%. The total number of VC deals grew 54%. Since 2016, the average VC deal size in space has steadily increased to $75 million.
- The emergence of public markets as a significant source of funding (10 space start-ups went public via special purpose acquisition companies in 2021, raising nearly $4 billion).
- A record number of mergers and acquisitions (13 in 2021) were driven by space-focused holding companies, recently public space companies, and legacy space incumbents.
This BryceTech report illustrates a record-setting year for start-up space funding and discusses how future performance risks remain for some space ventures, due to unproven business models, uncertain customer bases, and typically lengthy time horizons for space businesses to mature.