MOUNTAIN VIEW, Calif. — Many space companies that have gone public in the last year through SPAC deals have suffered major losses in the stock market in recent months, but that decline doesn’t necessarily mean a broader skepticism about the industry.

More than a dozen companies have either gone public through mergers with special purpose acquisition corporations (SPACs) in the last year or have announced plans to do so. However, most of those companies have seen their share prices drop significantly, in some cases by more than 50%, since going public.

During a panel discussion at the SmallSat Symposium here Feb. 8, Mike Collett, founder and managing partner of Promus Ventures, pointed to data his company had collected on the market performance of space companies. The Promus Ventures New Space Index, which includes many space companies that have gone public in the last year, is down more than 42% in the last three months. By comparison, the Nasdaq is down 12.25% and the S&P 500 4.5%.

“They’re getting obliterated,” he said of those space companies. “I do think the market is still trying to figure out where the floor is.”

Among those companies is Spire, which started trading at nearly $10 per share when it completed its SPAC merger in August. It closed Feb. 8 at just over $3 per share, after trading at recent weeks as low as $2 a share.

“I think we’re being punished right now in the public markets,” said Shay Har-Noy, general manager for aviation at Spire, during another conference panel. “That doesn’t change the cash on the balance sheet that has been raised.”

He said the company was focused on using that cash to pursue applications such as aircraft tracking and weather data with a large total addressable market, or TAM. “We have some work to do for going after that TAM.” In a Jan. 31 statement, Spire estimated it would have revenue of $43.7 million for 2021 and offered preliminary guidance of $85–90 million in revenue for 2022.

The surge of SPAC deals had an effect even on space companies that did not pursue them. “In the last year or two, you’ve had a lot of activity on the private side where rounds have been getting raised using SPACs as a stalking horse,” said Tom Gillespie, managing partner of In-Q-Tel. That allow companies to raise larger rounds at higher valuations.

If SPACs are no longer considered viable options, that could affect the size and value of future rounds, he cautioned. “It may just be a bump in the road or it may be something that’s more turbulent.”

However, the challenges faced by public companies won’t necessarily make it harder for companies to raise private rounds. “There is still plenty of capital out there for the right investment, the right team, the right business proposition,” said Nick Flitterman, the new chief financial officer of Mangata Networks, which raised a $33 million Series A round Jan. 12 to start development of a multi-orbit constellation.

“The space sector is 10 times more robust than in 2015 in terms of the quality of entrepreneurs, the quality of ideas, the quality of customers,” said Sunil Nagaraj, founder and managing partner of Ubiquity Ventures. However, he said the growth of the entrepreneurial space sector also means more “noise” in terms of bad companies. “On an absolute basis, there are more great startups at every stage than there were five or seven year ago, but there’s also more bad space startups.”

“It gets noisy for a lot of investors, and that can depress everything when there’s a lack of faith in the average space company,” he said. “We have to make sure there’s clarity for the average investor between the good and the bad.”

Collett agreed that there was still plenty of private funding available for space companies, citing as one example the $136 million Series D round raised by Iceye Feb. 3. “I’m optimistic. There’s a lot of good things going on,” he said. “But I think you have to be realistic about what is happening.”

But for publicly traded companies, he saw no immediate relief in sight as companies prepare to release quarterly earnings. “I’m not sure we’ve seen the worst of it yet, but you’ve got to get through these earnings reports.”

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...