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SPACEINVESTMENTQUARTERLYQ4 2018

The most comprehensive market intelligence – from the investors at the forefront

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elcome to the Q4 2018 edition of the Space Investment Quarterly. This time last year, we predicted that 2018 would be the Year of Small Launch, and it was incredible to watch that prediction come true. As the first small launch service began commercial operations, a number of others reached advanced stages of development, and $1.6B

© Space Angels 2019Front cover image courtesy of Spaceflight Industries

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of equity investment in Launch helped finance these companies. Looking forward to the year ahead, the Small Launch market will continue to grow and mature, but with multiple crewed spacecraft coming online, 2019 will undoubtedly be the Year of Commercial Space Travel.

2018 was another remarkable year, filled with significant financial and technical achievements that show the continued development of the space economy. Nearly $3.0B of equity capital was invested in space companies globally in 2018, bringing the cumulative total to $18.0B invested into 412 space companies since 2009.

The Entrepreneurial Space Age has gone global. The U.S. continues to lead global investment in Space, accounting for 57% ($9.6B) since 2009. However, Q4 saw increased international participation with significant investments in Chinese, German, Singaporean, and Canadian companies. Importantly, China now accounts for 5% of total global investment since 2009, illustrating that private companies will play an important role in China’s strategic space initiatives. In 2018 alone, $336M was invested in Chinese space companies, up 57% Y/Y. China also surpassed the U.S. in number of launches last year, for the first time in history.

Venture capital investment in Space is now a generally accepted theme, so we’ve included a special VC feature in this report to better understand these dynamics. Our research shows that since 2009, venture capital funds have invested nearly $4.2B into Space companies, with 70% of that capital deployed in the last three years. In 2018 alone, 114 VC funds made their first space investment, bringing the total number of VCs with a Space investment to 534. VC funds have primarily invested in Series A and B rounds, with a focus on Satellites and Launch. Space investments are particularly common among top-tier firms, as our new analysis reveals that 41% of the Top 100 firms now have at least one space investment.

DAWN OF THE ENTREPRENEURIAL SPACE AGE

Equity Investments From 2009 To Present

FULL YEAR 2018 EQUITY INVESTMENTS

INVESTMENT AMOUNT

$2,972,167,715EARLY-STAGE3

INVESTMENT

$690MEARLY-STAGEROUNDS

126

3. Early Stage is comprised of Pre-Seed, Seed, and Series A deals4. Late Stage is comprised of Series D+ and Liquidity Rounds

1. Cumulative non-governmental equity investment2. Other includes Foundations, Private Equity, Sovereign Wealth Funds, Mutual Funds, Crowd Platforms, etc.

Governmental Space Age

Entrepreneurial Space Age

1969Apollo landed on the moon

2010SpaceX publishes launch prices; introduces market transparency

2009SpaceX first successful launch of commercial payload

2012SpaceX Dragon becomes first commercial space vehicle to berth with ISS

2014NanoRacks launches commercial deployment via ISS

2015SpaceX lands orbital booster, ushers in reusability

1969 1983 2009 2010 2011 2012 2013 2014 2016

Satellites

Launch

250 Companies$8.3 B

Media &Education

Biosphere

Industrials

Information & Research

Planetary Markets

Logistics

77 Companies$8.6 B

35 Companies$15 M

13 Companies$515 M

11 Companies$154 M

8 Companies$77 M

8 Companies$244 M

10 Companies$147 M

Number of Companies Receiving Investment1

2015 2017 2018

412

$18 BCumulative Investment in Space1

Investment Source

Total investment in Q4 increased 55% over Q3, driven by growth in Venture Capital and Other (primarily Private Equity and Mutual Fund) inflows.

200

100 $5 B

$10 B

2018SpaceX Falcon Heavy unlocks commercial deep space operations

4 5

300

Round Share

Early-stage (Seed and Series A) rounds account for 72% of total investment rounds in 2018. Series B rounds made up 18% of total investment rounds in 2018, up from 6% in 2017. Growth at this stage was driven by the Satellites and Launch industries.

BY STAGE

Investment Amount

Q4 Series B investment tripled Y/Y, continuing the strong growth seen in Q3. The largest Series B rounds in the quarter went to Small Launch companies Vector+ ($70M) and Landspace ($43M).

BY INDUSTRY

Investment Amount Round Share

The Launch and Satellites industries continue to attract the most investment dollars, with $1.6B and $1.2B in 2018, respectively. However, we did see significant investments in Planetary Markets, Logistics, and Industrials this year as the world sets its sights on the moon and prepares for more commercial activity in Earth orbit.

In Q4, we observed the familiar trend of Launch receiving the most investment dollars and Satellites generating the most activity through rounds raised. It’s worth noting that we recorded investment activity across all industries in the space economy this quarter.

3%

64%

23%

SatellitesLaunch Industrials

Biosphere

$200 M

$400 M

$600 M

$800 M

$1400 M

$2 B

$1 B

$3 B

$4 B

$5 B

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Angel/IndividualVenture CapitalCorporateOther2

Seed Series A Series B Series C Other5Late Stage4

47%

25%

18%

3%5%

Seed Series A Series B

OtherSeries C Late Stage

NUMBER OFROUNDS

175

$200 M

$800 M

$600 M

Logistics

Planetary Markets

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Launch Satellites Industrials BiospherePlanetary Markets

Logistics Info & Research

Information & Research

$1600 M

$15 B

Investment Location

The U.S. continues to lead global investment in Space, accounting for 57% ($9.6B) since 2009. However, Q4 saw increased global participation with significant investments in Chinese, German, Singaporean, and Canadian companies.

57%20%

8%

7%

5%United States

United Kingdom

France

China

Other

Singapore

Canada

3%

3%

Media & Education

$1000 M

$1200 M

$400 M

$1200 M

$1000 M

5. “Other” includes non-traditional investments and self-financing from Jeff Bezos, Robert Bigelow, Richard Branson, and Elon Musk, who we have classified as individual investors providing large investments (hundreds of millions) in their own companies during unclassified round.+ Denotes Space Angels portfolio company

INVESTMENT ACTIVITY

6 6. Source: CNN7. Deals listed based on totality of available data8. Source: Wall Street Journal

Select Space Angels Portfolio Fundraising Full Year 2018

COMPANY ROUND AMOUNT LEAD

SpaceX Liquidity $500,000,000 Fidelity Investments

SpaceX* Undisclosed $273,199,776 Baillie Gifford

Vector Launch* Series B $70,000,000 Kodem Growth Partners, Morgan Stanley

ICEYE Series B $35,000,000 True Ventures

World View Series C $26,500,000

This quarter, five Space Angels portfolio companies raised capital. SpaceX+ closed $273M of a $500M round. At a $30.5B valuation, this makes SpaceX the second most valuable private company in the world behind Uber.6 Vector+ raised a $70M Series B, led by Kodem Growth Partners and Morgan Stanley, to scale Vector-R production and accelerate the development of Vector-H, the company’s larger payload model. Space Angels portfolio companies accounted for 41% of total non-government equity investment raised this quarter.

Top 10 Market Investments Full Year 20187

COMPANY ROUND AMOUNT LEAD

SpaceX Liquidity $500,000,000 Fidelity Investments

SpaceX* Undisclosed $273,199,776 Baillie Gifford

Global Eagle Liquidity $150,000,000 Searchlight Capital

Spaceflight Inc. Series C $150,000,000 Thales Alenia, Telespazio, Mitsui

Rocket Lab* Series E $140,000,000 Australia Future Fund

Thermo Companies Liquidity $100,000,000 Thermo Capital

iSpace Series A $90,225,000 Matrix Partners China

HyperSat Undisclosed $85,000,000 Incentrum Group

One Space Technology Series B $70,112,793 CICC Jiatai Equity Funds

Vector Launch* Series B $70,000,000 Kodem Growth Partners, Morgan Stanley

We continue to see significant capital invested in the Launch industry, across both Heavy and Small sectors. In addition to the SpaceX+ and Vector+

rounds, in Q4, Rocket Lab raised a $140M Series E, led by the Australia Future Fund.

Cumulative Number of Venture Funds Investing in Space

Venture capital interest in Space continues to climb to new heights. Our research shows that 114 firms made their first investment in space this year, bringing the total to 534. Accel Partners, Andreessen Horowitz, and Playground Global were three notable first-time Space investors this year.

Percentage of Venture Capital Rounds by Stage

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Series A

Series C+

Series B

Seed

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2018201720162015201420132012201120102009

Pre-2009

Canaan Partners Lux Capital

Data CollectiveFoundry GroupPromus VenturesShasta Ventures

RRE VenturesSequoia

Founder CollectiveGreycroftThrive CapitalTrue Ventures

500 StartupsGreylock CapitalTechStarsY Combinator

Accel PartnersAndreesen HorowitzPlayground Global

Box GroupGGV CapitalLightspeed Venture PartnersSpark CapitalSV Angel

Khosla Ventures

Space AngelsBenchmark CapitalDraper Fisher Jurvetson (DFJ)First Round CapitalFounder’s FundIndex VenturesKleiner PerkinsNew Enterprise Associates (NEA)Norwest Venture Parters

100

200

300

400

Felicis Ventures

500534

2014 20162015 2017 2018 YTD

35 rounds

63 rounds67 rounds

102 rounds

114 rounds

Accel Partners

Bessemer Venture Partners

Venture rounds in 2018 were mostly concentrated at the early stage (Seed and Series A), but Series B rounds increased 250% Y/Y, representing a meaningful 25% of total transactions. This trend demonstrates that the graduation of early-stage companies is supported by “smart” money.

Exits remain driven by Satellites, given that this is an established market with scores of new companies coming online and many cash-rich incumbents looking to outsource innovation to Space ventures.8 However, 2018 did see a very significant Launch exit with Northrup Grumman’s $7.8B acquisition of Orbital ATK.

Cumulative Exits by Sector

2009 2011 2013 2015 20172010 2012 2014 2016 2018

$10 B

$20 B

$30 B

$40 B SatellitesLaunchIndustrials

Media & EducationBiosphere

In Q4, Speedcast completed its $134M acquisition of Globecomm to strengthen the company’s remote communication offerings in the maritime and enterprise sectors. Additionally, Q4 saw the acquisition of two Earth Observation companies: Tellus Labs was acquired by Indigo Agriculture, an AgTech company hoping to incorporate Tellus Labs’ flagship product, Kernel, into its agronomic intelligence platform for farmers. Planet acquired Boundless Spatial, an open-source GIS software provider. The deal allows Planet to expand its business with the U.S. Government.

Top Exits Full Year 2018SELLER BUYER AMOUNT

Orbital ATK Northrop Grumman $7,800,000,000

Tencate Advanced Composites Toray Industries $1,150,000,000

Hispasat Abertis $373,000,000

Sea Launch S7 Group $150,000,000

Globecomm* Speedcast $134,000,000

VENTURE CAPITAL ACTIVITY

* Asterisk denotes activity in Q4 2018

Venture capital investment in Space is now a generally accepted investment theme, so to better understand these dynamics, we’ve included a special VC feature in this report. It is important to note that our definition of VC excludes corporate venture funds and fund-of-funds making direct investments. Based on this definition, our research shows that since 2009, venture capital funds have invested $4.2B into s pace companies, with 70% of that capital deployed in the last three years. In 2018 alone, 114 VC funds made their first space investment, bringing the total number of VCs with a Space investment to 534. VC funds have primarily invested in Series A and B rounds, focused on Satellites and Launch. Space investments are particularly common among top-tier firms, as our new analysis reveals that 41% of the Top 100 firms9 now have one or more space investments.

9. Determined by fund size, excluding corporate venture funds and sector-specific funds

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TOTAL VENTURE CAPITAL INVESTMENT

$4.2B

Since 2009, venture capital firms have invested $4.2B into space companies. VC interest in Space has hit an inflection point in the last three years, with 70% of capital being deployed from 2016-2018. During this period, investment has been concentrated at the Series A and Series B rounds, accounting for 60% of total capital deployed.

Undisclosed

Series C+

Series B

Series A

Seed

2009-2011 2012-2015 2016-2018

$3.5 B

$3.0 B

$2.5 B

$2.0 B

$1.5 B

$1.0 B

$500 M

Venture Capital Investment Amount by Round Over Time

NUMBER OF TOP 100 VCS WITH 1+ SPACE INVESTMENT

41%

Satellites335 rounds

Launch72 rounds

Earth O

bserva

tion

180 rounds

Manufacturing

& Components

53 roundsOper

atio

ns &

Grou

nd S

egm

ents

43 ro

unds

Communications

35 rounds

Positioning,

Navigation,

Timing

24 rounds

Small Launch60 rounds

Heavy Launch

7 rounds Industrials

Planetary Markets

Since 2009, VC firms have participated in 455 investment rounds, of which 114 (25%) occurred in 2018 alone. Of the total, 355 (74%) rounds were in the Satellites industry, of which 180 rounds (54%) were in the Earth Observation sector, with the other 175 (46%) split amongst Manufacturing & Components, Operations & Ground Segment, Communications, and PNT. The Launch industry accounted for 72 rounds (16%) of total VC investment, with 60 rounds (83%) going to the Small Launch sector. Just 48 investment rounds (11%) went to emerging industries like Industrials, Logistics, and Planetary Markets.

Venture Capital Investment Rounds by Industry and Sector

Logistics

EARTH OBSERVATION’S SHARE OF TOTAL ROUNDS

40%

TOTAL NUMBER OF VENTURE CAPITAL INVESTMENT ROUNDS

455

VENTURE CAPITAL ACTIVITY 2009-2018

Consistent with the overall flow of capital into the space economy, VCs have focused primarily on the Satellites and Launch industries. However, VCs appear more overweight in Satellites. Since 2009, investment into the Satellites industry represents 57% of total capital deployed by VCs, compared to 46% of total capital deployed by all investor types.

Of the $2.4B deployed into the Satellites industry, $0.9B (40%) has gone to companies in the Earth Observation sector. We suspect this sector is more palatable to generalist VCs because, compared to Launch companies, they are relatively less capital intensive and the path to revenue is shorter. Pure-play Earth Observation Analytics companies have been particularly attractive to VCs for their hardware-free, SaaS-like business models.

The $1.5B of investment into the Launch industry is almost entirely concentrated in Small and Heavy Launch, with 97% deployed between the two sectors. With SpaceX dominating Heavy Launch in terms of total capacity, new entrants in Small Launch, like Vector+ and Rocket Lab, have attracted venture capital investment for their flexible and frequent launch business models, benefiting from the growing smallsat market.

Venture Capital Investment Amount by Industry and Sector

Satellites Launch Industrials LogisticsPlanetaryMarkets

$500M

$1.0B

$2.0B

$1.5B

$2.5B

Small Launch

Heavy Launch

Launch Brokerage

Positioning, Navigation, Timing

Communications

Earth Observation

Manufacturing & Components

Operations & Ground Segments

Industrials

Logistics

Info &Research

Media & Education

PlanetaryMarkets

Biosphere

Launch

SatellitesEarly Stage Growth Stage Late Stage

Our data shows that the number of VC rounds at Growth and Late Stages are concentrated within the Satellites (63%) and Launch Industry (28%). However, at the Early Stage (Pre-Seed, Seed, Series A) we see a much greater diversity of industries represented. We believe this dynamic shows that as the Satellites and Launch Industries mature, and VC portfolio companies graduate, VCs are expanding their space exposure to include other industries.

Venture Capital Investment Allocation by Stage and Industry

UNIQUE COMPANIES RECEIVING INVESTMENT

222SHARE OF COMPANIES RECEIVING VENTURE CAPITAL INVESTMENT

54%

ADDITIONAL RESOURCES

The Space Angels Podcast regularly interviews commercial space entrepreneurs and industry experts, providing insight into the opportunities and risks of early-stage space investing.

Information Central dives deeper into the commercial space economy covering major sectors, innovative technologies, and public-private partnerships.

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2018 was another remarkable year for space. With an additional $3.0B of equity investment, there has now been $18.0B invested into 412 space companies since 2009. This past year we witnessed the realization of commercial Small Launch vehicles and, with $1.6B invested in the Launch industry in 2018, we will continue to see this sector mature in the year ahead. The investment landscape is experiencing increasingly global growth, with significant rounds in Chinese, Canadian, Singaporean, and German space companies. Venture capital interest in space is growing rapidly, with 70% of venture capital’s total $4.2B investment deployed in just the last three years. The Space Angels team is evaluating high-quality investment opportunities from around the globe and across all sectors - particularly in robotics, secure communications, and deeper in the satellite value chain. As we look forward to the Year of Commercial Space Travel, we invite you to join us as we fuel the future.

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Investment Databases

CrowdPlatforms

NewsPublic Announcements

Confidential Sources

• Pitchbook• Crunchbase• Mattermark• CB Insights

• AngelList• SeedInvest• Kickstarter• Indiegogo

• TechCrunch• Bloomberg• CNBC• Fortune • SpaceNews

• Press Releases• SEC Filings• Events

• Diligence Process• Company Management• Co-Investors• Commercial Partners • Government Partners

Space Angels launched the Space Investment Quarterly in October 2017 with the aim of uncovering insights about investing in the space economy. The data shown in this report is gathered from a number of sources across many categories, and no single piece of data can be added to our databases until confirmed by multiple sources. Our reported data is subject to change over time as previously undisclosed deals are added to our database. Below is a select list of our data sources:

OUR METHODOLOGY

COMPANIES TRACKED

1,480ROUNDS CATALOGUED

903EXITS CATALOGUED

167

Space Angels is the leading source of capital for early-stage space ventures. Founded in 2007, our portfolio includes many of the most prominent entrepreneurial companies in the sector. Through a robust and streamlined web platform, Space Angels provides unparalleled deal access and comprehensible intelligence to its accredited investor members, making it easy to discover, select, and invest in the most compelling space startups.

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Astrobotic named one of nine companies in the NASA Commercial Lunar Payload Services Program, with participants eligible for up to $2.6B in awards over the next ten years

The FCC approved SpaceX’s Starlink constellation, the first time the FCC has allowed a U.S.-licensed satellite constellation to provide broadband services through low-Earth orbit satellites

On the SmallSat Express, SpaceX launched and deployed 64 satellites from 34 companies and 5 Space Angels portfolio companies were onboard (Planet, HawkEye 360, ICEYE, ATLAS and Accion Systems)

ICEYE receives a €10M grant from Business Finland, a Finnish trade and economic development agency

Kepler Communications received approval from the FCC for its 140 Ku-band satellite constellation

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