The International Space Station (ISS) U.S. National Laboratory held its annual space-focused startup and investor networking event, Space Investment 2019, on July 31 at the ISS Research and Development Conference in Atlanta. The session included innovative startup presentations focused on tangible terrestrial revenue opportunities across the life sciences, medical technology, advanced materials, Earth observation, data analytics, and semiconductor sectors. Following the presentations, leading venture capitalists shared their thoughts on the current space economy investment landscape with its opportunities and risks.
At the event, LambdaVision discussed its novel medical technologies for addressing macular degeneration and retinitis pigementosa, and Allevi presented its plans for new bioprinting solutions, with both companies looking to radically change ways to address sizable markets. Advanced materials company Carbice discussed its carbon nanostructure materials with differentiated thermal management properties that are gaining customer traction. Orbital Sidekick highlighted its advantages in delivering hyperspectral imaging data and analytics with well-defined user cases for the pipeline industry, while Orbital Micro Systems was excited to share its first light data from its GEMS microwave satellite deployed this July. Given the expanding availability of Earth observation data, Geosite highlighted its value creation opportunities in delivering user-friendly data aggregation accessible to those not familiar with (or not interested in) the intricacies of the space industry. Lucid Circuit discussed its continuing progress in the development and commercial validation of its Astrum processor to deliver onboard data processing and machine learning capabilities for small satellites.
With the audience including several leading space-savvy venture capitalists and corporate investors, these insightful presentations were followed by numerous questions looking to gain further insight into areas such as use case economics, competitive differentiation, product technology parameters, manufacturing feasibility, regulatory requirements, etc.
The event concluded with an investor discussion with Mohammad Islam, partner at Threshold, and Michael Mealling, general partner at Starbridge Venture Capital, that covered the evolution in the space economy investment landscape over recent years, highlighting sectors where market opportunities and value creation potential look more or less tangible. The discussion also provided insights on the complexities involved in building a scalable business.
With several space-focused entrepreneurs in the audience, we appreciated investor insights on various criteria to access capital from the venture capital community. The areas highlighted included requirements for space startups to clearly define and articulate a market problem that needs addressing as well as the competitive advantage of their solution in addressing the identified problem. The latter is particularly important if a target industry sector (such as launch or Earth observation) has already seen meaningful capital influx. Focus on opportunities with large enough size and value creation potential is a must to justify to investors a need to incur sizable risks associated with building and scaling up a new business. In addition, the targeted market opportunities need to be mature enough to provide visibility into a path to sustainable revenue models and potential for revenue traction within venture capital-acceptable timeframes.
Finally, the discussion also touched on limited sizable capital markets exits (or M&A) for NewSpace companies thus far. While the picture here is expected to improve over the next two to three years, so far, this is a constraining factor in investors’ ability to validate their prior investment return assumptions, thereby also affecting the amount of capital available for to startups in the sector.
At the event, we were excited to see several new investors join those with already established presence in the industry, and we reported strong growth in the ISS National Laboratory’s investor network, which has nearly doubled over the last 12 months. This growth, combined with increasing engagement of entrepreneurs in the ISS National Laboratory ecosystem, has led to a broadening dialogue and capital introductions around potential investment opportunities in the expanding space economy. We are encouraged by the traction we see and look forward to our continued growth to create value in this still nascent ecosystem.
We thank all the Space Investment 2019 presenters for their insightful contributions and attendees for their participation!
Additional information on the Space Investment 2019 company presentations is available to registered investors on the ISS National Laboratory Investment Portal. Our Investment Portal is a free tool for companies and investors that facilitates dialogue between entrepreneurs and investors focused on commercial opportunities that emerge in the International Space Station and low Earth orbit economy ecosystems. (Accredited investors are welcome to register at www.ISSNationalLab.org/investment or email us with questions at [email protected].)