SpaceX conducts its 16th launch of 2017, delivering Koreasat-5A to orbit Oct. 30. Its planned 17th launch of the year, a classified payload dubbed Zuma, has been delayed past Thanksgiving by a fairing issue. (SpaceX)

HOUSTON — Despite a lack of “megadeals” involving space companies this year, investor interest in the industry remains strong thanks to several factors, according to one assessment.

Speaking at the SpaceCom Expo here Dec. 5, Carissa Christensen, chief executive of Bryce Space and Technology, said there’s been a consistent level of overall investment activity by venture capital firms into the industry this year.

So far in 2017, she noted there has been no so-called “megadeals” involving emerging space companies unlike the previous two years. In January 2015, Google and Fidelity led a $1 billion round in SpaceX. In December 2016, SoftBank led a $1.2 billion round in broadband satellite constellation company OneWeb.

“We haven’t, in 2017, seen the same size megadeal,” she said, adding that the $2.4 billion acquisition of Earth imaging company DigitalGlobe by MacDonald, Dettwiler and Associates, now called Maxar Technologies, might qualify. “But we have been seeing a consistent investment by VCs in 2017.”

Christensen didn’t give an estimate on the amount of investment in space companies in 2017 to date, but she noted that total investment in so-called “start-up space” companies totaled nearly $3 billion in each of the previous two years.

While 2015 and 2016 had similar total investment levels, she said the number of investors dropped in 2016, but with larger deals. “That may indicate a degree of maturity,” she said. “Instead of money going into early stage startups, there are more deals focusing on maturing companies that appear to be hitting their milestones and achieving success.”

There is, Christensen said, at least one space “unicorn,” parlance in the VC field for a privately-held startup with a valuation of more than $1 billion. SpaceX has a valuation of more than $21 billion from its latest funding round. Planet, she added, may also be a unicorn, with some estimates of its valuation at slightly more than $1 billion.

“Those valuations are very attractive to investors, and tend to help to support he investment thesis that space businesses are worth investing in,” she said.

That surge in funding in the last few years, particularly by VC firms that previously showed little interest in the space industry, can be linked to three trends, she said. One is that technologies like small satellites have made space more affordable to new ventures. A second factor is the potential for “massive returns” from applications like data products from satellite constellations that image the Earth every day, as well as satellite broadband systems.

The third factor has less to do with finances than with what she described as “billionaires and the stories that they’re telling” about the industry. Investments by people like Jeff Bezos and Elon Musk in space companies “has changed the narrative around space,” she said, discussing conversations she’s had with venture capitalists. “Because SpaceX was able to raise money, that opened the door in their partnerships to look at space ventures as potentially feasible businesses.”

However, Christensen warned that roughly three-quarters of all VC-funded companies eventually fail, and there’s no evidence that space companies will be immune from such failures.

“Not all of these businesses are going to succeed,” she said. “The failure of one high-visibility space business does not mean that the investment thesis is invalidated. It’s to be expected. That said, the failure of one high-visibility space business that’s attracted a lot of investment will be painful.”

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...