SpaceX’s successful landing of a reusable rocket booster last month opens a new frontier for commercial space startups by offering tremendous cost savings and attracting venture capitalists who once shied away from spatial ventures.
Space startups include nano-satellite makers, earth-imaging and weather-tracking technology developers, and ventures with ambitious plans to mine asteroids. If this fledgling industry can reuse rockets, that will save money and accelerate the pace of launches, enabling startups to more quickly test and update their technology, and replace old satellites more frequently — all critical for growing revenue.
“Driving down the cost of the launch, which is the single greatest barrier to entry for the startups and the investors ... makes (space startups) much more viable,” said Jeff Matthews, director of venture strategy and research at the Space Frontier Foundation, a space advocacy nonprofit.
To be sure, space remains a high-risk endeavor. SpaceX, founded by high-tech entrepreneur Elon Musk, had one successful rocket landing after multiple failures, and more work to do. Rocket companies including Richard Branson's Virgin Galactic have also had catastrophic failures. While another disaster could take momentum away from the nascent sector, venture capitalists say investor confidence has been buoyed by the historic landing of SpaceX’s Falcon 9, upright and intact, on December 21. It was the first ever successful recovery of a reusable rocket. Peter Hebert, cofounder and managing partner at Lux Capital, has long been enthusiastic about space ventures, but said his colleagues are now joining in.
“SpaceX’s success has been a major driver,-" said Hebert, whose firm backs Planet Labs, which builds shoebox-size Earth-imaging satellites, and Orbital Insight, a satellite image processing startup.
Planet Labs Cofounder and CEO Will Marshall said he has been talking to SpaceX about lowering launch costs. The startup has scheduled more than 200 satellite launches this year, about double its total previous launches. “It’s not going to have an effect tomorrow,” Marshall said. But “there is no question that this helps companies like ourselves and the growing space tech ecosystem.”
Since 2012, space startups have raised $2.2 billion, according to venture capital database CB Insights.
The lion’s share of that came in SpaceX's $1 billion round in January 2015, which valued it at $12 billion.
“That woke people,” said Richard Rocket, CEO and co-founder of NewSpace Global, which tracks for-profit space companies. “Investors are now starting to ask the question of 'Where is the next SpaceX '”
