5 Practical Ways VCs Are Investing in the Race to Monetize Space
Insights from Elon Musk’s Starlink Success
In an era where the final frontier is closer than ever, satellite technology is not just a tool for exploration but a catalyst for revolutionizing industries on Earth.
This report delves into the transformative impact of satellite innovations across five key sectors — from agriculture’s enhanced yield predictions to the newfound connectivity in remote regions through broadband internet. We’ll explore how these innovations are reshaping our world at the dynamic intersection of technology and venture capital in the burgeoning space industry.
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Space is the ultimate start-up sector. The opportunities it presents are as vast as space itself.
— Steve Jurvetson, Venture Capitalist and Board Member at SpaceX
REPORT AUTHORS
Matt Caspari
Managing Partner, Deep Tech FundMatt specializes in investments that target mission-driven founders and frontier, transformative technologies. His investments range from AI to aviation, battery technology, cybersecurity, direct air capture of CO2, energy generation, longevity, robotics, sustainable agriculture, and more. Prior to Alumni Ventures, Matt was the founding CEO of Aurora Biofuels, a deep tech venture that secured over $100 million in funding and was acquired by Reliance Industries. At Nike, he spearheaded global initiatives to expedite ‘Move to Zero,' the company's commitment to achieving zero carbon and zero waste. Earlier, Matt served as a strategic management consultant at Cambridge Pharma Consultancy (acquired by IMS Health) and gained experience on the M&A team at Bloomberg. He holds a BS in Biochemistry from Georgetown University and an MBA with a Certificate in Entrepreneurship from UC Berkeley.
Todd McIntyre
Managing Partner, Deep Tech FundTodd has more than 20 years of experience as a venture capital investor, entrepreneur, and senior technology operating executive, as well as deep knowledge of intellectual property and IP licensing. He has worked with capital structures ranging from seed-stage investments to public offerings and has experience in many sectors, including consumer media and web, optoelectronics, telecoms, cleantech, and healthcare. Most recently, he was founding Managing Partner of Grey Sky Venture Partners, a life sciences and digital health fund that pioneered a venture finance model combining early-stage capital with fund-owned intellectual property. He also served as a senior business leader in a technology incubator fund, where he led efforts to build, fund, and spin out several new deep tech businesses. Todd received his BA from Hendrix College and holds an MBA from Stanford Graduate School of Business.
1. Satellite Broadband Internet
Connecting the Unconnected
While physical broadband infrastructure has still not reached millions across the globe, satellites in the sky present no such barriers. The target customer base includes over 3 billion global users still without reliable internet access, plus transportation sectors like aviation and shipping, enterprise VPN networks requiring global reach, and government emergency response teams.
Companies like SpaceX Starlink, OneWeb, and Amazon’s Project Kuiper aim to offer global low-latency satellite internet access — a market estimated to reach over $17 billion by 2030. SpaceX is leading the charge, with its Starlink constellation of over 3000 satellites already delivering speeds upwards of 200Mbps to customers in remote areas. OneWeb has launched over 70% of an initial constellation of 648 satellites. Meanwhile, Amazon has pledged an investment of over $10 billion to deploy a network of over 3000 satellites.
Another success story is Rocket Lab, which designs and manufactures the Electron and Neutron launch vehicles and Photon satellite platform. Rocket Lab’s Electron launch vehicle has delivered more than 100 satellites to orbit for private and public sector organizations. Uses range from enabling operations in national security to scientific research, space debris mitigation, Earth observation, climate monitoring, and communications. The company went public in 2021 and has a ~$2.5 billion market cap.
Space-based technologies are the building blocks of innovation on Earth. GPS, geospatial intelligence and satellite communications are the invisible backbone that powers the world’s largest industries today.
— Chad Anderson, Space Capital Managing Partner
2024-2025 Predictions
- Services will expand beyond residential internet to include specialized offerings for sectors like aviation, maritime, remote scientific research stations, and disaster management teams. These services will provide critical connectivity in environments where traditional broadband is unavailable or unreliable.
- Tech advancements will likely improve the speed and reliability of satellite internet connections, potentially surpassing 200Mbps and offering more stable connections. This enhancement will make satellite internet a more viable option even in areas with existing broadband infrastructure.
- We anticipate that a substantial number of currently unconnected global users, especially in remote and underserved areas, will gain access to high-speed internet over the next two years. This shift will open new markets and opportunities for digital services in regions previously offline.
2. Satellite Imagery and Data Analysis
The New Oil
Not long ago, satellite imaging was the exclusive realm of governments and their military applications. However, the last decade has seen an explosion of satellite startups providing enhanced geospatial data that promises to transform industries from agriculture to insurance.
Satellite imaging platforms like Planet Labs have managed to drastically reduce costs by shrinking satellite size while enhancing imaging frequency and quality. The company’s constellations of small low-orbit satellites can image the entire land mass of Earth every day. This readily available and rich data, combined with modern data analysis techniques, is leading to what many call the “democratization of space data.”
We are already seeing niche applications like Descartes Labs analyzing satellite imagery to estimate crop yields and predict commodity prices. Orbital Insight helps track geo-economic trends by using computer vision on satellite and sensor data. Satellite imaging platform ICEYE provides ultra-high-resolution imagery with an average turnaround time of just three hours, crucial for time-sensitive monitoring in areas from emergency response to defense intelligence. Spire Global is another startup that established itself in the domain of data gathered from a network of small satellites, specializing in weather forecasting and maritime and aviation tracking. The company went public in 2021.
With satellite data poised to influence analytics and business decisions across sectors — much as seismic data revolutionized the oil industry — this high-growth segment has unsurprisingly attracted significant VC interest. Investments in pioneering companies like Planet Labs ($500 million+) and Capella Space ($150 million+) are examples of venture startups that have successfully attracted funding.
Satellite imagery has revolutionized our understanding of the Earth’s surface. It’s like having a time machine, giving us historical data and the ability to predict future environmental changes.
— Ellen Stofan, Planetary Geologist and Former Chief Scientist at NASA
2024-2025 Predictions
- The cost of accessing satellite data is expected to continue decreasing, making this technology more accessible to smaller companies and even individual researchers.
- Combined with enhancements in AI and machine learning algorithms, this democratization will allow more accurate, real-time interpretation of large datasets. This in turn will make satellite imagery more useful for predictive analytics in areas such as weather forecasting, natural disaster response, and environmental monitoring.
3. Space Sensors and IoT: Eyes in the Sky
In an increasingly connected world, satellite constellations in low and medium Earth orbits present distinct advantages as IoT data sources. Space-based sensors offer persistence, global reach to remotest regions, real-time connectivity, and robust data that ground-based networks cannot match.
Modern low-cost configurable satellite systems allow customized deployments of space-based sensors, communication links, and other payloads. Startups like Umbra Lab and HawkEye 360 focus on deploying IoT satellite constellations to create new geospatial data streams around remote asset tracking, focusing on natural disasters, agriculture, transportation networks on land and sea, and more.
In anticipation of a multi-billion-dollar, space-enabled IoT market by 2030, VCs invested over $100 million in Umbra Lab’s satellites with infrared and radio frequency sensors. Meanwhile, HawkEye 360 has raised over $300 million for its radio-frequency monitoring constellation. Its low-cost reconfigurable satellites promise persistent real-time data and analytics across the globe — an unprecedented information source for industries and government agencies.
Swarm Technologies set out with the ambitious goal of providing low-cost global connectivity for IoT devices. The company was acquired by SpaceX in 2021 for $524 million.
Space-based IoT networks will enable the next generation of autonomous vehicles, drones, and even robots on other planets.
— Gary Kasparov, AI expert
2024-2025 Predictions
- Satellite data will increasingly be integrated with IoT devices and big data platforms. This integration will provide more comprehensive insights, combining real-time data from ground sensors with satellite imagery, useful in sectors like logistics, agriculture, and urban development.
- As the space IoT network expands, there also might be a heightened focus on securing these systems from cyber threats. That will be crucial for ensuring the integrity and reliability of the data being transmitted.
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4. Ground Systems and Infrastructure: The Crucial Backbone
While satellites and spacecraft present exciting cutting-edge aspects of the space industry, the ground segment that supports spacecraft operations and utilizes space-generated data is crucial for commercial success.
Modern electronically steered flat-panel antennas from companies like ALL.SPACE (formerly Isotropic Systems) can connect with multiple satellite constellations simultaneously while tracking their movement in space. Software-defined satellites like those of startup Vector require innovative command and control systems on the ground. Processing data downlinked from observation satellites into usable analytics requires specialized ground infrastructure.
ALL.SPACE recently received over $100 million in financing, while Vector raised over $100 million to fund ground support elements for their in-space innovations. The 2030 projection of an almost $1 trillion global space industry predicates nearly 40% of that value being driven by the supporting ground-segment ecosystem.
With satellite mega-constellations expected to dramatically expand services and data flows to and from space, the race is on to build scalable ground infrastructure to handle the next generation of space commerce.
Ground systems are the invisible hand that guide spacecraft on their journeys. They are the unsung heroes of space exploration
— Elon Musk, CEO of Tesla and Space
2024-2025 Predictions
- The deployment of remote and mobile ground systems will likely increase. The result: More flexibility and responsiveness in satellite communication, especially for emerging commercial space ventures.
- Additionally, we can expect an increase in collaborations between government space agencies and private companies in the space ground systems. These partnerships will leverage strengths for mutual benefit and enhanced innovation.
5. Launch Services: A Lift to the Future
The dated notion of infrequent, massive, and prohibitively expensive rocket launches belongs to the past. In its place, we have dozens of innovative companies promising flexible, responsive, and even reusable launch vehicles at a fraction of historical costs.
Both launch demand and launch activity are hitting unprecedented highs thanks to smaller, less expensive satellites and the growing commercialization of space. But most of today’s capacity remains dependent on a small set of legacy launch systems. Upcoming launch systems companies promise change via reusable systems such as from SpaceX and air-launch technologies like that from Virgin Orbit. Momentus is offering an innovative space tug service that transports satellites between orbits using water plasma engines following initial lift by conventional rockets and other innovations.
Many venture funds and SPAC deals helped channel over $9.4 billion towards SpaceX. Investments exceed $228 million towards Virgin Orbit and $153 million into Momentus Growth as risk capital chases the profits promised by this crucial base layer of the space stack.
Another success story is Relativity Space, which invented a new approach to design, print, and fly its own rockets, starting with the world’s first 3D-printed rocket. By fusing 3D printing, AI, and autonomous robotics, the company is pioneering the factory of the future. Relativity Space has been selected by NASA as one of 12 companies to provide launch services for the agency’s Venture-Class Acquisition of Dedicated and Rideshare (VADR) missions. Relativity Space raised a Series F in late 2023 at a $4 billion+ pre-money valuation.
By 2030, Morgan Stanley estimates the launch services industry will grow over 3.4x from 2020 revenues. As reusable rockets and flexible on-demand launches become just another commercially available logistics service, the floodgates will open to the innovative utilization of space across sectors.
The future of launch services is about affordability, reliability, and flexibility.
— Tory Bruno, CEO of United Launch Alliance
2024-2025 Predictions
- As NASA’s Artemis program progresses and other space agencies and private companies aim for the Moon and beyond, there will be an increased focus on developing launch vehicles capable of interplanetary missions. The immediate wave of innovation is expected to be propelled by smaller, more cost-effective, and rapid launch vehicles, augmented significantly by advances in reusable launch tech.
- Looking ahead, there will be a sustained effort to research unconventional launch techniques, such as space elevators, electromagnetic railguns, or high-altitude balloon launches. These novel methods have the potential to revolutionize the standard approach to rocket launches, marking a significant shift in space technology.
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