GovWire

• The UK is the most attractive destination for private investment in space after the US
• Nine of the largest UK venture capital firms have invested in space since 2015
• Key areas of investment in the UK are Earth observation, manufacturing and satellite connectivity
• Growth of up to 11% forecast per year to 2030 across the global space ecosystem
• 95% of space investments were in revenue-generating companies in 2022 compared to 56% in 2015, demonstrating the growing maturity of the sector.

New analysis from investment experts offers insight on the wealth of opportunities found within the UKs 17.5 billion space sector.

The Expanding frontiers The down to earth guide to investing in space report, produced by PwC in association with the UK Space Agency, highlights expected global space sector growth of up to 11% per year over the next decade and a near doubling of venture capital investments in revenue-generating space companies in the UK between 2015 and 2022, with 63% of investors new to the sector in 2021.

The report details trends for new and established investors who are interested in growing their space portfolio, including opportunities with companies seeking to improve access to healthcare and tackle global climate change challenges, from decarbonising economies to increasing food security.

Craig Brown, Director of Investment at the UK Space Agency, said:

This report shines a light on the breadth and depth of space investment opportunities. From todays satellite communications to the future of orbital assembly, space has taken on an increased significance as a deeply embedded part of the global economy that is poised to grow at up to 11% per annum to 2030.

As the number of satellites above us increases dramatically, there are even greater opportunities to capitalise on the wealth of data they collect and on the international efforts spearheaded by the UK to keep the space environment safe and sustainable for generations to come.

According to the report, the UK has been the leading destination for space investment in Europe and second internationally behind the US since 2015, receiving 17% of global investment.

Matt Alabaster, Partner at PwC Strategy&, said:

This report shines a light on the substantial contribution that the space industry can make to solving some of our biggest global challenges, from decarbonising our economies to increasing food security and improving access to healthcare.

Our analysis shows that there are opportunities for investors of all stripes; the industry contains asset-light and technology-driven businesses, as well as infrastructure assets and supporting services businesses, all of which stand to benefit from the significant growth of the global space industry.

The Expanding frontiers report calculates a median 400% increase in deal size for early-stage investments and highlights a number of fast-growing UK space organisations, from satellite communications firm, OneWeb, to Wales-based aerospace manufacturer, Space Forge, which raised Europes largest ever seed round for a space tech company in December 2021.

Joshua Western, CEO and Co-founder of Space Forge, said:

Weve spear-headed new investment into the UK space sector from homegrown and valued international partners. The growth in our company and this sector is testament to the untapped potential of the UK space ecosystem.

We are excited to be part of a dynamic and rapidly expanding industry that makes a significant contribution to the UK economy.

Research shows that the UK has become a particularly attractive market for venture capital firms, being home to the HQ of leading space fund Seraphim Capital which was the top investor in UK space organisations in 2022 - and offices of US space and deep tech fund, TypeOne VC.

UK space organisations have received investments from at least seven of the most active global investors, and nine of the largest UK-based venture capital firms, including University of Cambridge Enterprise, Octopus Ventures and Molten.

Taking into account government, non-commercial (universities and research institutes) and commercial organisations, it describes the UK space sector as a hidden utility that underpins our daily lives and supports an estimated 370 billion of the countrys economy, mostly through satellite-based services.

The data follows figures in the recent Size and Health of the UK Space Sector Report showing that 635 million was invested in UK-headquartered space companies through 34 identified deals last year, with acquisitions accounting for three quarters of the total investment value.

Space sector income increased by more than 5% into 2021, outpacing both the growth of the global space industry in the same period (1.6%) and the general UK economy, which contracted by 7.6%.

The full version of the PwC Expanding frontiers report is available on request.