Spotlight: NewSpace Global

by

Established: 2010

Location: Based in New York with analysts and contributors in Brussels, Hong Kong and 12 U.S. cities

Top Official: Richard David, founder and chief executive

Mission: To bring thorough and current analyses related to the business of NewSpace to investors, wealth managers, entrepreneurs and business leaders

SAN FRANCISCO — When Richard David set out to build a business to link investors with space industry entrepreneurs, he anticipated fear, pessimism and doubt. “Given the legacy of America’s space program, convincing people in the financial sector to invest in NewSpace is obviously quite challenging,” David said.

He also expected to meet investors with little knowledge of the commercial space industry. At a networking event last year, for example, David began discussing the commercial space business by asking a venture capitalist whether he was familiar with Virgin Galactic. “Yes,” the venture capitalist responded. “That’s the company that put that guy on the Moon.”

David and his colleagues have encountered similar misconceptions as they work to convince investors that the commercial space sector is poised to offer the type of promising financial opportunities that paid off for some of the people who invested in social networking and new energy startups before those firms began selling stock publicly. They note, however, that even investors with little or no knowledge of the industry often are eager to learn about potential investments. The venture capitalist who thought Virgin Galactic sent an astronaut to the Moon may not have known much about the space industry, but he was interested in learning about it, David said.

Still, the story illustrates the challenges NewSpace Global faces in trying to bridge the gap between space industry entrepreneurs and potential investors. Not only are investors often unaware that commercial space businesses exist, but space industry entrepreneurs often are so focused on new technology that they pay little attention to “management, marketing, sales, fundraising and investor relations,” David said. “We have to constantly emphasize the value we provide to the industry as well as to the financial players.”

David established NewSpace Global in 2010. “Frankly, I thought the timing was right,” he said. “Although the first-tier NewSpace companies grab all the headlines, we have seen a proliferation in promising new startups in recent years that indicates that NewSpace has reached a critical turning point.”

Before founding the company, David spent nearly a decade identifying the top 100 companies in the commercial space industry while working as a corporate attorney in New York. “Virgin Galactic, Blue Origin and SpaceX are in the headlines but those other 97 are not easy to find,” he said. In addition to the well-known companies, NewSpace Global tracks firms such as Ventions LLC of San Francisco, whose engineers are developing miniature liquid bipropellant rocket motors and small turbopumps, and SkyBox Imaging of Mountain View, Calif., which seeks innovative applications for satellite imagery.


Top 10 Firms on the NewSpace Global 100 Index

RANK                       COMPANY NAME

1                     Space Exploration Technologies (SpaceX)

2                     Virgin Galactic

3                     The Spaceship Company

4                     Intelsat

5                     Stratolaunch

6                     SkyBox Imaging

7                     Orion (subsidiary of Dynetics)

8                     Blue Origin

9                     Masten Space Systems

10                   Moon Express


Once David identified the top 100 commercial space firms, he worked with financial analysts and associates to create NewSpace Global’s signature product: the NewSpace Global 100 Index, which ranks privately held, for-profit companies based on a proprietary algorithm that takes into account many factors including management, capitalization and technology. “This index allows our subscribers to better understand how to allocate their capital to get the best returns,” Frank Mycroft, NewSpace Global chief financial officer, said. It also optimizes investments, which helps to accelerate the growth of the industry, he added.

The majority of companies included in the NewSpace Global 100 Index produce space components or offer space-related services, but the index also includes companies tangentially related to the space industry including GOOD Music, a record label founded by producer and rapper Kanye West. “Good Music seeks to profit directly from the growth in NewSpace (the most obvious example would be when Kanye West shoots a music video in space),” David said in a Feb. 22 email. While West has not announced any plans to produce videos in space, he has expressed interest in the industry and toured the SpaceX manufacturing facility on Dec. 23.

The NewSpace Global 100 Index also includes Cameron Pace Group, a company founded by director James Cameron and cinematographer Vince Pace to develop 3D technology and production services. Cameron has spoken publicly about his desire to experience spaceflight and to produce movies in orbit.

“Ultimately, we’re showing that many companies that might not be considered by the aerospace sector as ‘space companies’ per se, actually are either intentionally (or at times inadvertently) positioning themselves to profit from NewSpace growth,” David said. NewSpace Global also follows terrestrial companies with products, such as three-dimensional printing, that have potential aerospace applications.

Joe Landon, managing director of the Space Angels Network, a San Francisco-based organization that links investors with aerospace startups, said the NewSpace Global 100 Index is “helping make commercial space more accessible to investors who are not space enthusiasts.”

NewSpace Global publishes additional indices, including a list of publicly traded NewSpace companies and a ranking of smaller companies that may soon join the ranks of the NewSpace Global 100 Index. NewSpace Global also tracks real estate companies seeking to profit from the commercial space sector. That list includes companies that own or develop land near Spaceport America in New Mexico, California’s Mojave Spaceport and Cape Canaveral Air Force Station in Florida, as well as a firm that has invested heavily in commercial real estate near SpaceX’s headquarters in Hawthorne, Calif., David said. More in-depth news is included in Thruster, a monthly report published by NewSpace Global on industry activity, public policy and investments.

Customers gain access to each of those products through subscriptions. Costs vary based on the number of publications subscribers choose to receive. NewSpace Global supplements that subscription business with customized research and analysis for clients seeking detailed information on a particular company, industry sector or topic of interest.

“In the next year or two, we hope to see the customized [research] and subscriber businesses grow fairy rapidly,” Mycroft said. “Our goal is to become the leading information service provider on the NewSpace sector by providing high-quality, timely information to subscribers.”

The NewSpace 100 Index is updated multiple times per day to reflect news that might help or hurt companies on the list. When SpaceX docks its reusable Dragon capsule to the international space station, the company’s NewSpace Global 100 Index score will change, David said. Similarly, when space companies hire or fire talented individuals, their scores change. Timely information is critical to investors, said Mycroft, an aerospace engineer who also holds a master’s in business administration from Harvard University.