VC Lab launches special support track for Space Tech

Humanity will be interplanetary within the next decade, creating enormous investment opportunities.

The decreasing cost of launch, growing dealflow, and increasing relevance of Space Technologies in terrestrial industries make this an opportune moment for venture capitalists to launch funds dedicated to Space Tech. 

That’s why VC Lab is adding a track for funds focused on aerospace and related technology.

Now is the best time in history to launch a Space Tech VC fund.

Decline in Launch Costs

Demonstrating technology in orbit is a vital step towards commercialization and profitability for Space Tech companies. Historically, getting technology into space has been expensive, inconvenient, and unreliable.

In recent years, the cost of accessing space has plummeted by over 90 percent, driven largely by advancements in reusable rocket technology pioneered by SpaceX. For the average Space Tech startup, putting technology into space is now cheaper and simpler than ever. “Downstream” Space Tech companies such as space-related SaaS, AI, or satellite imagery providers can generate value for customers using the 400TB of data generated per day by constellations of thousands of satellites.

This trend will only accelerate in coming years – SpaceX’s large launch vehicle Starship promises to not only cut costs even further but also cut satellite design constraints such as weight and size, opening the door to exciting new opportunities in Space Tech development.

Expanding Deal Flow

The number of Space Tech startups is increasing, fueled by accelerators, incubators, and university programs worldwide. In 2023, venture capital investment in space startups surpassed $8 billion, reflecting growing investor interest. 

Traditionally, most venture investment in Space Tech went into satellite-building and GPS applications. In 2024, more Space Tech companies are addressing different segments:

• Logistics and servicing: managing space assets – avoiding debris, remote mission control, or providing servicing such as refueling and repositioning;
• Legacy reinvention: improved distribution and provision of satellite internet, out-of-the-box techniques to further cut satellite manufacturing and launch costs, and re-thinking GPS;
• Emerging industries: orbital industrials such as optical cables or pharmaceuticals developed in microgravity; in-situ resource gathering such as harvesting materials from the moon or asteroids;

Dual use: with global instability and regional conflict high, Space Tech that can address intelligence and defense needs have found additional growth opportunities.

Terrestrial Markets Embracing Space Technologies

Space technologies are increasingly finding applications in terrestrial markets, creating robust demand for Space Tech startups. 

Remote sensing, for instance, is transforming industries by providing real-time data that enhances decision-making. In agriculture, satellite imagery helps optimize irrigation and crop yields, while in insurance, space-derived data supports risk assessment and disaster response. 

Satellite-based technology has also emerged as a critical component in understanding climate change. No longer only the commercial interests of governments and climate NGOs, companies measuring how our planet is changing are finding eager customers in the private sector: asset/infrastructure risk assessment, supply chain resilience, and agriculture planning.

These cross-sector applications highlight the strategic value of Space Tech innovations in solving real-world problems, further driving their adoption and expanding the potential market for investors.

Challenges of Space Tech Investment

Despite its promise, Space Tech ventures face unique hurdles, particularly the high capital requirements and longer commercialization timelines.

• Hardware Costs: Many ventures need extensive funding for satellite testing and launch, delaying time to market.
• Market Adoption: For software startups, user education is often required to explain to slow-moving, traditional industries (insurance, agriculture, utility management) why satellite data can be useful to their bottom lines.
• Long timelines: For hardware startups, startups may need 8-12 years to achieve commercialization, profitability, and exit, requiring patient capital and long-term models.

To overcome these challenges, it is critical to have experienced professionals leading spacetech-focused VC firms. Fund managers with deep industry expertise can better evaluate the technical and financial hurdles facing startups, tailoring investment strategies that align with the sector’s unique dynamics. By designing funds with flexible timelines, providing targeted mentorship, and leveraging their networks to secure partnerships, these VCs can offer startups the support they need to succeed.

VC Lab’s Space Tech Track

To address these challenges and catalyze growth, VC Lab is offering specialized support for New and Emerging Managers launching Space Tech focused venture capital funds in Cohort 17.

Managers whose funds include a focus or pillar in Space Tech will meet Decile Partners funds investing in Space Tech, network and support each other, and have dedicated meetups to discuss firm-building for this sector.

So, are you ready for takeoff?

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