By Chris Forrester
Silicon Valley Space Week was praised by Millbank’s partner Dara Panahy who said the conference sessions were now the benchmark and that going global was the next step for SatNews.
Panel chairman Panahy asked his colleagues during the Leveraging Capital in the Current Financial Climate session to give a snapshot of how they saw the industry today.
Mike Collett, Managing Partner at Promus Ventures said the construction of the market was very different today but perhaps was now ready to turn from a challenging recent past. “Things are being re-set but boards and companies can be out-of-whack in terms of valuation. Execution is key.” Promus was an early investor in Rocket Lab and was pleased with the 60-70 percent growth in revenues annually. “Hitting your milestones is vital, and we are seeing target timetables shrinking to 3-5 years instead of the 5-10 years that would have been normal a few years ago.”
Dr Ronald Epstein, MD/Aerospace & Defense at Bank of America Securities, said they were cautious especially ahead of the US election and uncertainty as to whether the Federal Reserve would cut interest rates and by how much. “There is still a lot of economic uncertainty around”. He added that most of the quoted space businesses are owned by retail investors, not institutional investors. Space needs more institutional investors.
Tyler Letarte, Principle at AE Industrial Partners, said his portfolio was now seeing opportunities although they were still “scratching their heads occasionally” over valuations.
Sita Sonty, Partner & MD at Alix Partners, said it was inevitable that businesses which were underperforming were under pressure. We’ve seen $200-$300 million per month [being invested] but Space was only a small fraction of this volume. “Performance matters” and the better ones have good sales engines.
John Stack, Snr MD, head of A&D Investment Banking at B. Riley Securities cautioned that he expected some M&A activity for those players who were less successful.
SpaceX was examined as to how it was disrupting so many elements, whether consumer, maritime and IFC. Mike Collett said SpaceX was extremely positive in his view, and should be watched as to how to build a model that works. Letarte said SpaceX was dramatically impacting the industry and was affecting how deals were being done in some sectors, and not always beneficially. Asked whether SpaceX could mount an IPO, Dr Epstein said he expected a positive response from the market.
