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Success in Space Missions Driving VC Funding to Space Startups

The success of some high-profile private space ventures has investors looking to back the next big thing._ Blue Origin is set to resume space tourist flights on May 19 after a nearly two-year hiatus, while Boeing’s first crewed spaceflight with Starliner has been pushed back until May 21. Interestingly, Virgin Galactic shares saw a surge alongside GameStop and AMC Entertainment as traders piled back into meme stocks earlier this week.

Not every space specialist dreams of working at SpaceX or Blue Origin. Some aspire to become the next Elon Musk or Jeff Bezos. Fueled by new business cases for space and growing amounts of venture capital cash, space startups have proliferated. In the past decade, 1,779 firms worldwide have received investments totaling $286 billion from private equity, according to data from Space Capital.

Investors are still coming despite some notable failures in the space venture arena. Richard Branson’s Virgin Orbit sold its remaining assets last year after filing for Chapter 11, and shares of Virgin Galactic recently fell below $1. Last month, Astra Space was warned by Nasdaq that it has to get its share price back above $1 or face delisting in October. Additionally, Rocket Labs’ stock has plummeted 80% from its peak in 2021.

Nonetheless, venture capital (VC) firms have become more excited by the demand for satellite infrastructure and the growth of national space programs. “It’s transformational for humanity, but they also realize they can drive really good returns for their investments,” says Phil Scully, the 48-year-old co-founder of Balerion Space Ventures, which just closed its fund to new investors after reaching its $50 million target.

Many VC firms, like Balerion, are drawn to startups created by former employees of SpaceX, Blue Origin, or Anduril Industries, a defense technology firm. Andy Lapsa, 41, worked at Blue Origin for over a decade. Seeing that more firms wanted to transport goods to and from space, he left his job in 2019 to start Stoke Space Technologies, which builds reusable rockets.

With a commercial business case and an expanding pool of workers with space experience, Lapsa says, “I saw a huge opportunity to be able to put those three elements together and create what’s hopefully a transformational business.” In October, Stoke announced a new Series B investment that more than doubled the company’s total funding to $175 million.

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