The Business of Space
Smaller, cheaper, lighter, leaner. Welcome to the ‘NewSpace’ era, where starting a space tech company doesn’t have to be rocket science.
Just a decade ago in Singapore, a career in space would truly have been an astronomical proposition. Today, things have changed. Though without a national space programme, Singapore is home to a constellation of space tech startups with diverse business propositions. Need a rocket launcher, a space-based laser communications network, a fleet of data-gathering satellites or a space debris collection system? Look no further than Singapore’s ‘NewSpace’ or ‘Space 2.0’ scene.
SGInnovate’s Founding CEO, Steve Leonard addressed the crowd at Space Startup Night, where space tech company founders and investors gathered to share industry and technical insights
“A lot of people are starting to get involved in really good technology for seed funding of even just $100,000,” said Mr Adam Gilmour, founder and CEO of Gilmour Space Technologies, a company based in Singapore and Australia which is developing low-cost rockets to carry lighter payloads such as nanosatellites into space.
One of the purposes of Space Startup Night is to tell everybody that it doesn’t have to be a pipe dream to start a space tech company.
As miniaturisation, artificial intelligence, robotics and other relevant technologies become cheaper and more accessible, startups are seizing new-found opportunities to jumpstart innovation in the space sector—a trend that has not gone unnoticed by tech investors.
A panel made up of Mr Atsushi Taira, Chief Growth Officer, Mistletoe Inc; Mr Vishal Harnal, General Partner, 500 Startups; and Mr Jonathan Schiff, Managing Director, Schiff Family Office spoke about the commercial and investment opportunities in space tech, here in Singapore.
“Space tech is actually borderless, and if we can share knowledge with each other, a totally different world could be possible. Of course, there is a long way to go, but we like to support visionary people,” said Mr Taira.
“Mistletoe is a big fan of decentralisation, democratisation and empowering people. For a long time, space tech was part of government activities, but as you’ve heard today, the private sector can now finally touch it,” he added.
Mr Schiff agreed,
When you talk to these entrepreneurs, everybody in the space industry is really serious about confronting big issues. I’m in a good spot, so I want to do things that are really impactful for my children and grandchildren, and that really impact humanity.
“This desire, coupled with the clear market demand for space tech solutions—the rocket industry, for example, currently serves only a fraction of the nanosatellite launch market—makes the sector very attractive for investors,” Mr Schiff added.
No such thing as a free launch
“But VCs must also balance their goals of supporting aspirational, impactful technology against the long development timelines common in the industry, as well as the need to be accountable to their own investors,” said Mr Vishal Harnal, general partner at 500 Startups.
A successful startup, therefore, will be one that understands that a grand vision by itself is not enough. To boost its chances of acquiring investors, a startup also needs a business model that is sustainable in the present day.
Take Gilmour Space Technologies, for example. While it works on the harder problem of building rockets that can reach low Earth orbit, the company also makes sounding rockets which have immediate research and commercial applications, said Mr Harnal. These could include taking weather-related measurements at sub-orbital heights.
Transcelestial Technologies aims to develop a laser communications network that can be used in deep space exploration but is currently also using its technology to help telcos achieve markedly better connectivity on the ground, said Founder and CEO Mr Rohit Jha, who also spoke at the event.
Fortunately, declining technology costs have made it more feasible for startups to test and fine-tune their prototypes through iteration, added Mr Mark Dembitz, head of Asia Pacific sales & business development at satellite data company Spire. “[Cheaper technology] allows you to effectively start building hardware like software today,” he said.
You build version 1, then version 1.1 and 1.2, ship it, get feedback from your customers and then improve it. You can’t do that with traditional satellites, unless you have billions of dollars.
Said Mr Harnal: “Not only are [these companies] thinking and dreaming big, but there’s a clear path to making the company at least self-sustaining. They’re generating some cash to do this themselves rather than forever being on the wheel of financing.”
The search for synergies
Despite growing enthusiasm for space tech among entrepreneurs and investors, the industry still faces its fair share of challenges. For one, although governments are increasingly willing to support space tech-related research, their risk appetites remain relatively low.
One strategy startups could take is to find synergies between their technology priorities and those of the government, said Mr Steve Leonard, SGInnovate’s Founding CEO. Singapore, for example, is keen to fund research and development in additive manufacturing (also known as 3D printing), a technology which has many applications in space tech. Rocket parts and even solid rocket fuel can be 3D printed, for instance.
While not every government would finance a rocket launch, most would back research into additive manufacturing and other technologies that go towards achieving that goal. “You might need to decompose [the end goal] a little bit and look at it from those particular vantage points,” said Mr Leonard.
Still, there is no denying that the space tech scene, especially in Singapore, has come a long way—light years, some might say.
500 Startups’ Mr Harnal asked,
Isn’t this amazing that we are sitting here in Singapore in a room full of people, talking not only about space tech but also its impact on humanity?
“Kudos to everyone who is building up this ecosystem. There is no better time in the history of this region to be an entrepreneur.”
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