September 24, 2023
Sci & Tech

Space-related startups leave the VC sphere

Space-related startups leave the VC sphere

Due to the current economic upheaval, venture capitalists are turning to safer investments, forcing space technology entrepreneurs to scale back their lofty goals, according to VC company Space Capital.Investors have been forced to reassess their investment strategy and concentrate on businesses that have marketable products as a result of decades-high inflation, quickly rising interest rates, and the conflict in Ukraine.

According to a research by Space Capital, investments in companies that gather, process, and analyse data on space fell by 80% in the third quarter to just over $1 billion from nearly $5 billion in the same period the previous year.According to the report, VC investment volume in space enterprises decreased by 44% while the overall market fell by 31%.

According to managing partner of Space Capital Chad Anderson, VC firms “are aiming to limit their exposure to capital-intensive startups with low or long-term profitability models.”Because of this, the infrastructure layer for space will be most negatively impacted by the current economic crisis.

Publicly traded “new space” businesses like Rocket Lab USA (RKLB.O), Astra Space (ASTR.O), Spire Global (SPIR.N), and Satellogic Inc (SATL.O), whose shares have plunged between 49% and 92%, have also been impacted by the negative sentiment.

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