Investments in the US space industry witness a 53 percent drop in the first quarter of 2023. Read to know more about the reason behind the eight-year low.
Report: US space industry receives record low investments
A new Space Capital report revealed an eight-year record low in the space industry investments of $2.2 billion. As per the report, the challenging market conditions and high-interest rates make it the lowest funded quarter since 2015. “The steep drop in fresh capital has left many companies in a vulnerable state, while the failure of Silicon Valley Bank, a leading provider of venture debt, has added to the challenge,” revealed a report by Space Capital.
“Of the 100+ launch companies that collectively raised $27 billion over the last decade, there are currently only two that are operational: SpaceX and Rocket Lab,” added the report. The report also highlighted the “dichotomy between the winners and everyone else” in the manufacturing sector.
More on the change in investments:
Moreover, “the risk threshold to invest in space companies was much higher earlier, but given recent market uncertainty, investors may not be as risk-loving and space being a nascent sector. Many are dialing back,” stated Edison Yu. Yu is an analyst for Deutsche Bank. “From the public institutional investment side, there is not really much interest in the lunar economy. Personally based on my conversations with companies, I believe there is actually a lot of potential in the lunar economy,” added Yu.