A series of large fundraising deals in Europe since the start of the year is raising hopes that the region could be turning a corner for early-stage space investments.
European venture capital activity has lagged far behind the United States, where tech investors around a decade ago helped spawn a “newspace” movement that has flooded the industry with entrepreneurial startups.
Young companies have long grumbled about how few sizable space-focused venture capital funds are in Europe compared with the other side of the Atlantic Ocean.
But there are signs this could be changing as Europe’s plan for a 6 billion euro ($6.4 billion) sovereign multi-orbit connectivity constellation helps galvanize the industry.
France-based space services company Exotrail announced in early February it had raised $58 million in a Series B round led by French investors.
Swiss orbital debris removal startup ClearSpace also recently bagged about $29 million in a Series A round led by Dutch early-stage investor OTB Ventures.
And The Exploration Company, a Germany-headquartered venture founded a little over a year and a half ago to develop reusable orbital vehicles, secured some $44 million in what it says was a record Series A round for Europe’s space technology sector.
Three large space financing deals all announced within three weeks “is something completely new” for Europe, says Adam Niewinski, OTB’s co-founder and general partner.
These deals also came despite tough macroeconomic conditions that generally hit early-stage companies harder than their larger, more established peers.
According to David Ford, a partner at British financial services firm Silverpeak that advised ClearSpace on the funding round, it shows how some “of the decent European funds, in particular, have now finally alighted on their space sector strategy.”
Niewinski credits much of the vibrant space venture ecosystem in the U.S. to NASA’s public-private partnership push and willingness to award long-term contracts to startups.
The European Space Agency is finally following suit, he says, and is making sure contracts are not only designed to be won by industry titans such as Airbus or Thales.
He also sees changes at the European Commission level as Europe seeks more autonomy and independence in space, partly in response to U.S.-based SpaceX’s growing dominance and China’s state-backed plans to beef up its capabilities.
“A few years ago, you wouldn’t see anyone from the European Commission attending tech events” focused on space, he says, but now senior officials are frequently attending these conferences to get closer to the industry.
“Europe realizes that the race is on,” he says.
While Niewinski believes it’s not too late for Europe to get up to speed, some areas are harder to catch up to than others.
Trying to overtake SpaceX in the launch market would “be a huge challenge,” he concedes. However, in-space servicing and other applications in their infancy “are still very much open for competition.”
And although changes in Europe’s approach to space startups won’t transform its ecosystem overnight, they are already boosting the confidence of investors hoping to turn a profit from successful businesses.
“If you asked me three years ago, I would be a bit skeptical, but today I’m far more optimistic in terms of how Europe is going to be catching up with the U.S. and China,” Niewinski says.
This article originally appeared in the March 2023 issue of SpaceNews magazine.