Georgia Tech Developing Rad-Hard Chip for U.S. Government
WASHINGTON — U.S. firms seeking to open space to private citizens saw a modest 6 percent growth in 2008 with over a quarter of a billion dollars in total collective revenue last year, though investment in the emerging personal spaceflight industry rose more than 20 percent since January 2008, according to highlights of an annual report commissioned by the Commercial Spaceflight Federation.
Carissa Christensen, co-founder and managing partner of the Alexandria, Va.-based Tauri Group, a market research firm that prepared the report, said the findings were based on interviews with 22 U.S. commercial spaceflight companies, including most members firms of the Commercial Spaceflight Federation.
Commercial Spaceflight Federation President Brett Alexander said the report shows a dramatic change in the industry over the past several years.
“This survey reveals modest, but increasing, revenues from commercial spaceflight activities, including growing deposits and contracts for government development activities,” he said Oct. 6. “But the real highlight is the sizable investment that is not government related. Growing investment from private equity funds and other investors has turned longtime skeptics into people who are taking notice.” According to the report, U.S. commercial spaceflight was a $261 million industry in 2008. More than three-quarters of that revenue — or about $211 million — came from “hardware sales, development and support services.” Within this category, $126 million was generated through services to mostly government clients that were leveraged for use in commercial spaceflight vehicles; some 19 percent, or $39 million, came in the form of second-tier revenue directly supporting spaceflight, such as vehicle development and training; and another 21 percent, or $45 million in revenues, came from mostly government work leveraged to develop organizational capacity, the study found.
In addition to indirect revenues, personal spaceflight services generated $50 million in direct revenue and deposits, an increase of more than 25 percent over the previous year, the study found. This category includes Russian Soyuz flights booked through Space Adventures of Vienna, Va., and deposits taken by New Mexico-based Virgin Galactic and others for suborbital flights.
Christensen noted that in previous years, the study included indirect revenue derived from non-spaceflight activities that member companies engaged in to make ends meet. In 2006 and 2007, that figure hovered around $24 million. In 2008, it exceeded $1 billion, an increase Christensen attributes to a compositional shift in the evolving spaceflight industry.
“The past couple years have been interesting because when you listed all the companies doing commercial spaceflight … they had almost no other revenue,” she said. “Now that number has exploded because new firms have come into the market. Some of the companies that are acting as vendors or providing services like training or engineering are very big companies.”
For example, this year’s report saw the addition of El Segundo, Calif.-based Wyle Laboratories and Sparks, Nev.-based Sierra Nevada Corp., two diversified contractors with around $1 billion or more in revenue.
Christensen noted that the federation’s member companies secured $1.2 billion in total investment commitments through the end of 2007, with about one-fourth of that money received and spent. To date, cumulative investment has grown to $1.46 billion, a 20 percent increase over the period ending in December 2007, with almost half of the investment funds already spent and some $830 million available, Christensen said.
“This, to my mind, is what sets this industry, at this stage, apart from previous waves of entrepreneurial vehicle development,” Christensen said. “The fact that there is about a billion and a half dollars from credible sources committed to this industry is very meaningful.”
Individuals and angel investors are the biggest source of industry capital, providing more than 50 percent of investment to date, the study found. Private equity follows close behind at 30 percent, while government backers comprise 15 percent of commercial funding sources. Christensen noted that 4 percent of capital came from industry reinvestment, up from a little over 1 percent a year ago.
Christensen said the U.S. commercial spaceflight industry employed 1,186 workers in 2008.
Christensen noted the report focused only on companies seeking to develop or support commercial human spaceflight activities. For this reason, the Tauri Group did not include revenue or data from Dulles, Va.-based Orbital Sciences Corp. because the company focused primarily on NASA cargo delivery services to the international space station in 2008.