By Chris Forrester
Silicon Valley Space Week’s second day, and part of its Satellite Innovation sessions, kicked off with another busy room to hear ‘Mobilizing Capital for Space Innovation: What Investors Want from New Tech’, reported Chris Forrester
The expert panel, moderated by Alexis Sáinz (Partner, Hogan Lovells US LLP) and comprising Mike Collett (Managing Partner, Promus Ventures); Dr Shahin Farshchi (Partner, Lux Capital); Karl Schmidt (Managing Partner, KippsDeSanto & Co); Noemie Vauthelin (US Zone Director, Safran Corp. Ventures) and Alexandra Vidyuk (CEO and General Partner, Beyond Earth Ventures).
This was undoubtedly one of the most important sessions of the 3-days as it was all about ‘raising the money’. Alexis Sáinz spends most of her time in the space sector. She reminded delegates that the year had suffered “significant uncertainty” in the M&A markets. “The space industry is seeing massive disruption in demand, lead by Defense, but tough decisions to be made for investors”.
A common thread amongst all the panelists was that they all mentioned AI, while ‘Robotics’ was also of interest and over and above the more traditional space-based investment opportunities. Karl Schmidt also mentioned that he saw SPAC’s (Special Purpose Acquisition Company) which were re-entering the market in greater numbers than in 2024. Private equity was always available for early-stage investment, he said, but also along the process to Series B, C, and even further options, but also where some well-established businesses needed to shore up their supply chain and that could lead to opportunities.
Schmidt added that there were differences between the US and Europe, and where the US was more likely to put cash on the table when compared to Europe.
Mike Collett explained that start-ups with little revenue can always be looked at, but inevitability potential margins need to be solid and with real business ahead of them. There are plenty of financial sources out there for when growth was in place. “Do the small things, do the block & tackle well, it is amazing what might flow 3 or 4 years later,” he suggested. Collett added that going public might not be the best advice, and many companies were deciding to stay private.
Alexandra Vidyuk said her base metric for investment was that venture debt in the space industry was guided by the need to see that for every $1 invested should be matched by $3 from government. She added that recent Space Tech investment requests were, by and large, over-subscribed and this was a good sign. However, some investors were reluctant to tie up their capital for 6,8 or 10 years. They were looking for shorter involvements.
Safran is the French multinational aerospace, defence and security business. Safran employs around 100,000 and achieved sales last year of €27 billion. The Ariane rocket is a j-v between Airbus and Safran. Safran’s Noemie Vauthelin said that government cash was always a good guide to a project’s potential health. Safran’s overall policy was risk-averse, but they would be prepared for long-term investment.
Dr Farshchi said that in aerospace and defense there was a concentration of businesses to invest in. Investors see that these few companies, such as those in AI, can enjoy very real returns as growth kicks in. In some cases within just 6 months an investment has doubled. This can lead to very real challenges for businesses which are, in my view, in the middle. They are no longer early-stage, but if not sought-after then raising some cash is possible, but perhaps not the $25 million or $50 million in the next round.
Collett said that Europe was definitely seeing fresh activity especially in Defense-related opportunities and the position had improved significantly over the past 6 months.
The panel said that Space-based companies can still raise capital through a traditional variety of methods, including venture capital (VC) and private equity, as well as having government contracts in place, or where a strategic partnership was available to help provide confidence. The panel said there is a growing focus on private investment, with venture capital flowing to early-stage companies for R&D, while larger, established companies might, of course, pursue public offerings or government contracts for increased stability.
