Europe surpasses US in personal area funding for first time

According to new, Europe has surpassed the US in private investment in space technology for the first time ever Research.

A study by Seraphim, a leading space technology venture capital firm, found that the European sector attracted $565 million in the first quarter of this year. All of North America, meanwhile, raised $456 million. Asia followed with investments of US$306 million, while the rest of the world invested around US$29 million.

The numbers made Europe the world’s largest market for private space finance.

Quarterly investments in Europe reached almost 50% of the entire previous year. In contrast, US investment has continued to fall compared to 2022. Asia was the only region to post growth over the past year but failed to continue that trend in the most recent quarter, losing its lead over Europe.

US investment has shrunk dramatically since 2021, but Europe is on track to surpass 2022 funding. Photo credit: Seraphim Room

Represent the results of Serphim a rally in European investment – ​​and a dramatic slump for the US.

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Last year, the economic downturn had pushed funding to levels last seen before 2021. According to Seraphim, growth investors have shifted to earlier-stage deals to avoid high burn rates and capital requirements.

Growth-stage startups have also been delayed in raising funds. Instead, they have sought alternative sources of funding and attempted to lengthen runways until economic conditions improve.

Despite these challenges, Seraphim gave cause for optimism about space technology funding. For one thing, investment and transaction numbers remain well above historical norms.

Although funding has shrunk from the record highs of 2021 and 2022, those spikes were largely driven by mega rounds from industry giants like SpaceX, OneWeb and Virgin Galactic. After adjusting for these outliers, Seraphim ranked the first quarter of 2023 as the fifth-highest funding quarter to date.

In the last 12 months to the first quarter of 2023, transaction numbers in Asia and Europe continued their rapid growth, a trend first observed last year.First-quarter growth was particularly strong in the UK, which accounted for a quarter of all space technology deals in Europe. Credit: Seraphim

Overall, activity in the space economy appears to be sustainable. Rob Desborough, managing partner at Seraphim – and a speaker at TNW València last month – pointed to a “very significant recovery” this year – particularly in Europe.

“Investments are up 75% compared to the last quarter with the highest number of deals [128] was ever recorded,” Desborough told TNW. “As a global investor, it’s really exciting for us to see the growth of operations in Europe.”

One reason for this excitement lies in Spacetech’s biggest deals. European companies secured five of the top 10 investments last quarter – including the largest of them all: a $165 million funding round closed by Isar Aerospace. The German missile maker is the first European company to top Serpahim’s rankings since OneWeb in Q3 2021.

European companies secured 5 of the top 10 investments this quarterA total of $1.4 billion in international investment went to private space startups — a 75% increase from $801 million in the fourth quarter of 2022. Photo credit: Seraphim Room

As calls for European launch services mount to compete with US rivals, Isar can be optimistic about future funding opportunities. In fact, the continent’s entire space technology sector has been fueled by a drive for sovereign capability.

“European governments have put a huge focus on space sovereignty over launch, constellations and communications in 2023, which is really boosting investment,” Desborough said.

For investors, government support for startups in emerging regions can reduce their perceived financial risks. If the support yields results, European space technology could expand further across the cosmos.

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