The United Kingdom's Harwell Space Campus in Oxfordshire, England. Credit: Harwell Space Campus

The space sector is experiencing significant growth globally, but Britain’s part in forging the future of the space ecosystem still remains relatively unknown. 

Over the last three years, over $23 billion has been invested in the space sector globally — reaching the heights of almost $10 billion in 2021. The global space sector is now worth over $469 billion, with 77% accounted for by the commercial market. Analysts project future growth of up to 11% per annum.

Britain already holds a sizeable proportion of the market, accounting for almost 15% of global investment, second only to the U.S. We also have some of the most notable global businesses, such as the satellite communications company OneWeb. OneWeb operates hundreds of low Earth orbit satellites to provide low latency connectivity and global internet access. This growth is thanks to falling launch costs and the development of smaller, more advanced satellites which are deployed at speed and scale. 

The U.K. is also competitive in terms of the number of deals taking place. Last year 296 SpaceTech companies completed funding rounds around the world, and 15% of these deals were investments in U.K. businesses. Overall, the U.K. now hosts a dynamic industrial base of over 1,500 space companies, taking advantage of the country’s talent pool, world-leading infrastructure and access to export markets.

These figures are down to several factors that support the U.K. investment landscape. Firstly, the British government is stepping up its spending on space. It is deploying £3 billion ($3.9 billion) over the spending review on space activities, which is the first part of the £10 billion commitment over the decade commencing this year. These investments support both the UK Space Agency, and international collaboration through the European Space Agency.

Secondly, the U.K. is home to the City of London and has access to the vast sources of capital it provides. In a recent webinar, Paul Bate, CEO of the UK Space Agency, highlighted the importance of capital accessibility, adding: “Without capital, there is no sector, we have to have that ability to grow and fuel that growth. We have one of the fundamental financial centres of the world and we have a regulatory framework that is safe and secure.”

This was one of the reasons we first decided to create the Seraphim Space Investment Trust — democratising and opening up access to space for investors while also providing startup and scale-up businesses with the funds they need to invest, develop and grow. In just eight years, Seraphim has helped to support over 100 companies across a range of space specialisms. Many of these companies have gone on to become some of the most important players in the space industry: Iceye, Hawkeye 360 and Astroscale, delivering outsized returns for investors. We’re not alone in seeing the opportunity of space: Nine of the 15 largest U.K. venture capital investors have invested in space since 2015.

Thirdly, the U.K. is leading the way in research. It is home to four of the top 10 universities in the world. It is ranked first in the G7 for “Research, Impact, and Reach.” This creates a phenomenal pool of talent within the U.K., whether it’s already in the space sector or helping develop ideas for future companies. The opportunities presented by these institutions, and others, are enormous and represent a real competitive advantage for the country.

We are still at the start of what is set to be a global, trillion-dollar market by the end of this decade. Therefore, the current trends within the U.K. space sector are reflective of those happening globally. There is a significant amount of money being invested in early-stage investments — with new records being set for funding in seed rounds and Series A companies.

When looking at the sector breakdown of U.K. investment, most of the funding has gone into the “product” sector. These are companies that are building products around satellite data, delivering insights for customers that may not even know satellites are involved! Many of the product companies, particularly in the U.K., specialise in climate data. For example, Be Zero Carbon raised $50 million late last year to provide ratings for the voluntary carbon markets, enabled by space data. Investment is also increasingly prevalent in defence. The war in Ukraine has demonstrated the need for rock-solid communications. Our own portfolio company, All.Space, is developing ground terminals that enable seamless communications across every orbit, essential for battlefield logistics.  

There are still some improvements that the U.K. could make, such as increasing the number of spinouts from universities and ensuring the great research being done at our universities is commercialised quickly. But overall, the country is punching well above its weight in space. I am very confident that we will hear of more and more U.K. startups and scale-ups that are using space to solve the Earth’s most challenging problems. When combining the government’s policy focus, educational facilities and financial capabilities, it provides the perfect environment to produce entrepreneurs and transform the space sector.

Maureen Haverty is vice president of Seraphim Space, a U.K.-based space technology investor