Insights
Space – it’s not all about launching rockets and satellites - Raphael Roettgen
The most interesting space companies do something useful on Earth
There are many misconceptions about space investment, according to Raphael Roettgen. Many of them are due to the relative youth of the sector, at least in its latest iteration. “We are still very early on”, he told guests at a Stonehage Fleming Direct webinar, last week. “Think the internet circa 1995-96. There is a lot more road ahead of us”, he said.
Perhaps because the sector is in its infancy, Raphael warns against getting distracted by the noise around the showier end of the market: the headline-grabbing, capital-intensive business of launching things – rockets and satellites – into space. Conceptually, he explained, investors are faced with two categories of company. “On the one hand, you have space enabling companies – companies that facilitate going to space like rocket or satellite businesses. On the other, you have space enabled companies, which use space tech to do something useful for existing large customer groups on Earth”.
Although a lot of the focus from public and private investors has been around space enabling companies, said Raphael, his team at E2MC Ventures sees more opportunity in space-enabled companies. “We see a lot of potential as large non-space sector companies realise how to use space technology. There remains an educational challenge, but almost every sector you can think of can use space technology to their advantage. Take Rio Tinto for example, they recently launched a partnership with a hyperspectral imaging startup, Pixxel, which will give them access to data to aid them in identifying mineral resources and monitoring mining sites”.
Investors can be reassured that existing companies espousing space-enabled technology come with already-validated markets, explained Raphael. “If you talk to companies in the agriculture, chemical or insurance sectors, for instance, there is already customer interest there. When an opportunity comes across my desk that combines space tech and an already established industry, that’s interesting. If you can combine that with a management team who understands both space tech and the existing market, that’s really exciting”.