Space IQ: Q4 2024 Review

“The infrastructure is very important, but the space economy is much, broader than that. I mean, it's not just the infrastructure, it's how you're using that, that infrastructure. So the fact that applications came back, I mean, that was the hardest hit over the last couple of years. If you've been listening to these, these, conversations that we've been having, you know, applications really felt the brunt of the tough capital markets. So, and a lot of that was driven by, AI and spatial intelligence. Right? So, a lot of geospatial intelligence applications getting funding, and, and leading us in, to a very exciting, future.”

‍

Hi, everyone. Thanks for joining us. And as always, welcome to our Space Capital headquarters here in New York City. I'm Chad Anderson here with Justus Kilian and we are, chatting about what happened, in Q4, talking about our Space IQ, our Space Investment Quarterly Report. And as we like to do at this time of the year, we're also going to take a look back at 2024, in its entirety and, and, and look at what happened during the year.

Chad Anderson

And also take a look ahead to 2025, talk about some predictions and what we expect to happen during the year. So 2024 was a big year for the space economy, and, was a big year for SpaceX actually. They hit a number of big milestones for them. So a record number of global launches last year, 259. Half of those, were SpaceX.

And the number of launches is one thing. The, mass to orbit, the amount of satellites and payload that went to orbit I mean, they made up a much larger percentage. I forget the exact number, something like 90%. So half of all launches, 90% plus of mass to orbit through SpaceX. So they're really dominating the, launch game and the access to orbit game.

There was a really big, monumental sort of symbolic turning point in my mind when, Boeing, bungled their Starliner, mission, they finally got, to launch NASA astronauts to the space station, but then were deemed, not safe. The vehicle was not safe to bring those astronauts back. So SpaceX was tapped to go and save those astronauts and rescue them from the International Space Station. Which for me is, you know, the incumbent struggling, to do what the, the challenger and the new entrant was able to do several years earlier and, at a much better sort of quality.

Chad Anderson

So for me, that was a really big sort of turning point, a big win for SpaceX. Obviously they caught their super heavy booster, down at Starbase in Texas. And then from an investment perspective, there are $26 billion invested. That was up 30% year over year, which I think is really important, for a few reasons.

One, it kind of looks like maybe 2023 was the bottom. We're seeing some recovery and we're getting back into a growth phase of the space economy, which is pretty great. After a few tough years in the capital markets. But also, this was without SpaceX, right? I mean, they are, they've not tapped the capital markets for the last couple of years because they've been funding their growth with revenue.

So the fact that we have seen 30% year over year growth in investment dollars, those are from folks and companies other than SpaceX, is really promising. And then the other one for me is, applications rebounded in a big way. Right so, Space infrastructure is great. It's super important. You can't, you know, have software if you don't have hardware to run it on.

The infrastructure is very important, but the space economy is much, broader than that. I mean, it's it's not just the infrastructure, it's how you're using that, that infrastructure. So the fact that applications came back, I mean, that was the hardest hit over the last couple of years. If you've been listening to these, these, conversations that we've been having, you know, applications really felt the brunt of the tough capital markets.

They're back up 200% year over year. Which is great because if more people are are using data from orbit, that means there's more demand for that infrastructure, right? So, and a lot of that was driven by, AI and spatial intelligence. Right? So, a lot of geospatial intelligence applications getting funding, and, and leading us in, to a very exciting, future. So those are some big ones for me. What did you see in 2024 that really caught your eye?

Justus Kilian

Yeah. I think, you know, we've been in this period of sort of, a reckoning where a lot of capital is deployed in 2021. SPACs hit the market. And, you know, sort of quickly, all ships rose and then quickly sank. And, I think we're finally seeing, differentiation in the public markets that is showing, you know, investors being able to discern quality from the rest.

Right. And I think public markets are able to sort these things out much quicker than in the private markets. You know, it's just much more fluid. And, the repricing of assets has happened. You know, you've got Rocket Lab hitting key milestones companies significantly appreciating, AST hitting key milestones significantly appreciating, and then Intuitive Machines, you know, while you have other companies that are not hitting those milestones De-listing and sort of you know going away.

And so I think that that was a critical step that we saw sort of mature in 2024. The private markets are a little bit slower to realize this. We have been working through it in 2023 with, I think, a low point of private equity, private equity flows. 2024, we're seeing a rebound. The repricing isn't fully there. I mean, there's a couple big companies out there that investors have a lot of money in, and there's some big question marks have been publicly highlighted. Relativity Space, Axiom, those are a couple that I think are going to be really important to keep an eye on, to see sort of how things stabilize. But, I would say that where we're at now and what we're seeing from the data, we're sort of through that reckoning period.

Right. And we're now seeing a revival of, you know, growth in not just seed stage. Seed has been very consistent in the private markets, but we're starting to see B and C rounds for companies that are really breaking out, that have top teams hit their milestones, large rounds. And we saw that sort of come back, in a clear way in 2024.

So Impulse Space was a great example. We've got a couple other ones, including Stoke, they launched, they announced a big round. Loft announced a big round. Muon Space. You know, Zona had a big round. So, you know, these teams that are, you know, doing great things are raising capital and it's really exciting to see. So, that was a big one for me.

Chad Anderson

The differentiation is really key I think and we've seen, you know, the separation, the the companies that have come out the other side are really in a much stronger position now. Right. So, so, and, and last year was also a record year for acquisitions, right. In terms of the number of acquisitions. So not in terms of the value of those acquisitions.

Right. But the number of acquisitions, which to me says that there's there was a lot of cleanup happening in 2024, right? That that again, like you mentioned, there was a run up in 2021 when capital was cheap. A lot of, capital went to not such great ideas. A lot of that sort of tide has come in and is now washed out, and a lot of that's been cleaned up.

Although to your point, I think that there are still a couple of of those big players, those big names that raised a lot of capital in 2021 that have managed to wait out this entire period of a couple few years and have not had to go out and tap the capital markets again. So you so you haven't seen them reprice right, and some of them are in a pretty are now sort of facing the music.

That they're not going to be able to grow into their valuations. And then what does that mean. So there probably are still there's still a little bit more pain coming. I think they are going to be, you know, a handful of large marquee sort of names that, that don't make it this year. But for the most part, I think we're through that as well.

Justus Kilian

Yeah. And I think zooming into like Q4 specifically, I think that there's been a lot of investor interest and this isn't fully reflected in the numbers yet. There are transactions that were happening over year end that are not reported yet. And like there was just a tremendous amount of activity that happened in Q4. Investors were really moving.

Companies were pushing to raise. Rounds did close. We were closing two deals over the year end. We looked at 2 or 3 others that were, you know, set to close at year end as well. That's incredibly fast pace. Like there was a lot happening year end. And, I was sort of able to take that sort of feeling on the investment side and then go back and look at data from space talent and look at, Q3 to Q4, total jobs listed on the platform.

And we saw roughly a 20% increase in the jobs that are listed across, you know, that platform. So, you know, hiring is also really picking up, talking to some of our key recruiting partners. They said, you know, early in Q3, starting in September, they saw, the the battle for top talent to fill key positions, sort of reaching, you know, back to the 2021 height like it is really, stiff competition out there for great people and there's just not enough people out there.

So the combination of those two things make me feel like on the investor side, momentum is certainly building. And I think that's all a result of, you know, some of the key milestones we hit. You named a few, but I've got sort of a fun list here. I don't think this is exhaustive, but like science fiction is becoming reality. Okay, so we have the largest communications array deployed in Leo. We had the largest rocket ever to reach space. We had the first capture of a booster on a launch pad. We had the first commercial human spacewalk. We had the first commercial lander on the moon. We had the first commercial factory in space. You know, these are incredible milestones being hit and achieved by commercial space companies.

So it's not just SpaceX executing. SpaceX is doing incredible things, but other companies are executing incredibly well. And that's sort of like setting the stage. Then for, you know, the first few weeks in 2025, which, you know, have been blowing so far, right?

Chad Anderson

Yeah, I mean, for all 2024 was a massive year, but 2025 is shaping up to be even bigger, right? I mean, just in the first couple of weeks, we've had, the Transporter 12 mission, launched 130 satellites, to orbit with all types of different spacecraft and sensors, on satellites and also, reentry vehicles.

Half almost half of those were our portfolio companies, which is really fun. Yeah. The next day they launched two lunar landers, two privately funded, venture backed lunar landers, Ispace in Japan and Firefly here in the US. As part of the NASA, Commercial Lunar Payload Services program to the robotic precursor missions to set the stage for human landings, coming up shortly with SpaceX‚ Starship and others.

And then, Blue Origin reaches orbit on its first attempt, which is fantastic news. I mean, we'll probably talk about that a bit more. Finally launches, after 25 years of the company being founded, a decade after they announced this vehicle. Right. Finally, gets to orbit. But it does on its first attempt, which is impressive.

And SpaceX is taking another big step forward in its test program with our next generation, Starship, vehicle. So, pretty exciting starts to 2025. And I think, I think that it really is just a start because, I see a whole lot more growth coming up.

Justus Kilian

Yeah. I mean, one thing that I thought was really fun is, Vast rolled out their commercial space station that they've been building, and they're bringing that into testing. So you can see the, the, the completeness of, of that, what they've built so far and they're going to be testing in that's supposed to go between and, and it's just super exciting. Like, you know, it's becoming real. Right.

Chad Anderson

So, we have, written about this in the Space IQ report. We've got, ten predictions about, what's going to happen in 2025. We think that this could prove to be one of the most transformational years on record for the space economy. And this is driven by a few things. Between Musk's close ties with the incoming president, and administration that's expected to be pro-growth, anti-regulation. The emergence of Starship in this next generation vehicle.

I mean, you've got vehicles like New Glenn, and Rocket Lab is going to debut a new, vehicle later this year. And there's other vehicles coming online to give some competition to SpaceX. But at the same time, SpaceX is moving the goalposts with Starship, and staying that much farther ahead. So, I mean, I think we're on the verge of, of some significant changes that are going to accelerate growth.

So over the next four years. Right. So, I think there's going to be a much greater, focus on promoting the space economy and on, commercial integration into government programs. I think, that SpaceX is the most likely, beneficiary here. I think a lot of people are pointing to the fact that, you know, his relationship with the incoming president, with, with, the donations to the campaign, with his status as first buddy.

Right. Being the key driver to that, I think that is going to influence things and be, a key factor here, but also, SpaceX just has the best solution on the market in a lot of cases. And, and sometimes the only solution on the market. So, it's hard to argue why, governments or enterprise or any other customers wouldn't go to SpaceX, right?

So, that's a big one. I think, that's really going to also benefit other companies outside of just SpaceX. Right? So as particularly those that are doing novel new, activities. Right? There's going to be I expect to see some streamlining of regulation and, making it easier for, companies to try new things, and bring new novel capabilities online.

Justus Kilian

Yeah. I think the technical foundation is already set. Now it's like, how do we remove the barriers to allow these, you know, companies to flourish? SpaceX will be leading the way. But, you know, Starship is going to be you know, helping develop, you know, new markets and enabling new founders to do great things. They're bringing a ton of capacity online.

You know, they have to see other companies that are able to leverage that capability. And so, you know, that means new companies, new, you know, use cases, you know, emerging. And that's going to be really exciting to watch.

Chad Anderson

Yeah. And, you know, the the, SpaceX has said that it's the regulation that's been holding them back, particularly on their Starship test program. Right. They managed to get to a launch cadence of almost a month at the end of 2024, which is pretty impressive for a program of this size and magnitude. They're planning to launch, to double that in launch, 25 times, in 2025, which is, which is also incredible.

And I think a lot of that is going to be enabled by, the FAA moving faster and giving them the launch licenses faster and getting more familiarity with the vehicle and what it can do. So Starship is going to come online this year. That's another massive one. I mean, we touched on an already we've touched on, on this report and in many, of our publications.

And but I think that this is, really important because, of the potential impact that this vehicle is going to have, it's going to accelerate growth in existing markets. It's going to, create enable entirely new markets and make a lot of it, existing infrastructure obsolete. I mean, it's going to completely change our relationship with orbit and how we get there.

Which is pretty exciting stuff. I think we are going to see, some reevaluation and some re-architecting of the Artemis program. I think that there's going to be a more direct line to go to Mars using the Starship vehicle. I think this is a much larger conversation that we probably can't get into all the details today, but it's it's it's interesting to think about particularly, the emphasis, you know, the, the, the, the focus on doing something new, SpaceX has been wanting to get to Mars for, you know, that.

And that is their primary goal since the founding of the company. They're bringing a vehicle online that's going to enable them to do that. And you've got a president that's coming in that wants to, you know, to to put his name on something. Right. So, I do think that there's going to be some reevaluation of the Artemis architecture and the leveraging of Starship to go more direct to Mars, which could be good for SpaceX and anyone else who's trying to do, trying to do that.

Chad Anderson

Interestingly, in 2024, Emerging Industries, had a really big year in terms of investment. We saw a lot of investment dollars go into these emerging areas, not launch, not satellites. This is the space stations, lunar markets, industrials and manufacturing and space. And like, logistics and on orbit servicing and that sort of thing. Yeah. Which is pretty interesting because you're starting to think about how or you're trying to see how founders are starting to build for this post Starship world and are starting to think about these new markets that are opening up.

So it makes up a small portion of the space economy. It now makes up 3% of total investment over the last ten years, which is, you know, so it's a small piece, but it's one of the more rapidly growing pieces of the puzzle. And, you know, with lunar markets, in particular, there's been $1 billion invested in lunar markets over the last five years into a couple of dozen different companies.

Right. And so, like we mentioned, there's two, landers on their way to the moon while they're on their way, SpaceX is going to launch another lunar lander, in February. So, anyway, there's a lot of activity happening in these new areas, which again, like, seemed like science fiction not too long ago and probably still seem like science fiction to a lot of folks.

Justus Kilian

I mean, this is where we saw a couple of big rounds this year as well. Impulse Space raising their series B, out of Germany, you know, one of their largest Series B's on record. It's in the top three. The exploration company raised 160 million, you know, to be able to take cargo to different orbital destinations, including the moon.

So, you know, it's a tough area to compete. It's going to be really exciting to watch. And then, you know, one of the critical requirements as these new launch vehicles come online, Starship helps scale up the ability to take, you know, vehicles to space. The ability to monitor what's up there and coordinate activity at scale is going to be fundamental to the long-term preservation of this, you know, growing economy. And so, you know, that all fits within that logistics bucket and is absolutely essential.

Chad Anderson

Yup. So, SpaceX's, despite their direct line to the White House, we do expect to see more competition. We're already starting to see that with New Glenn coming online. We expect other launch vehicles coming online. We do expect to see also, some more competition for Starlink and for the satellite communications business. Kuiper, is going to be making some moves this year.

And we should see Kuiper Amazon's Kuiper starts come online. Apple's investment in Globalstar, AST Mobile delivering for telecom partners. The Chinese with their thousand sales Constellation, you know, mimicking Starlink and doing something very similar. So there is more, more than just SpaceX. SpaceX has had, a really great run and has been the dominant player, up until this point.

We expect them to continue to be, going forward. And as kind of a barometer of, of what is possible here in terms of investment and return on investment. Right. It's widely reported, that the company just raised, capital. We had an internal, employee tender where the company bought back shares at a $350 billion valuation.

Right. So that the most valuable private company in the world. And I think if you talk to the, executives at the company, and we share this view that, you know, there's what, a handful of trillion dollar companies out there on the publicly traded markets. And, you know, this could be one of them. What they're doing is just too important, right?

So, anyway, there's a lot of opportunity here. SpaceX is out in pole position and kind of showing everyone what's possible. But there's a lot of other companies that are coming online, and doing really interesting things as well. What else about 2025 get you excited?

Justus Kilian

Well, I think that we're going to see, a number of, you know, new, technologies come online. So, you know, this, this race for, you know, space stations will actually sort of start to materialize. So Vast is expected to launch in 2025. You know, being the first to actually get, you know, hardware in orbit, I think that'll be really incredible to watch and see and sort of see how that all shakes out.

You know, there are some big contracts to be awarded associated with Artemis. And, you know, the first sort of landers and rovers will actually start really doing stuff on the lunar surface. And, you know, that'll be almost entirely driven by commercial companies. You know, there will be some countries that are also doing some work alongside that.

But, you know, to actually see the foundation of how, how we might start to explore, navigate, you know, communicate and develop, you know, the lunar surface, I think is going to be incredibly exciting to watch and to see that as a potential market start to develop.

Chad Anderson

That's happening now.

Justus Kilian

It is. Yeah. Yeah. So, I mean, I think those are some of the biggest things that are, you know, exciting. There is one area that, investment has started to flow into that sort of a little bit under the radar that we haven't really explicitly talked about. But it is this, question of energy production from space and how that, you know, could actually be leveraged back here on Earth.

And, there's a couple it's several different ways to be able to do this. Whether it be microwave or infrared or, or sort of direct reflection of sunlight. But we might we might start to see early tests of that in 2025. And, yeah, that's, that's, you know, as we think about the future of, clean energy and what that might look like across autonomous vehicles and electric powered systems and AI, that question of, you know, consistent, reliable power, we need more sources.

And, you know, could space be viable or could it not? You know, we'll start to learn some of that, I think, in the coming years. So it'll be an interesting thing to watch.

Chad Anderson

So bringing it back down to, existing markets a little bit as well. So, Starship’s coming online, one of the biggest markets, that this is going to, you know, it's gonna accelerate growth in existing markets is probably one of the biggest near-term impacts that this vehicle is going to have. It's going to launch many more satellites.

If you look at the number of satellites that are on orbit, over time, it is now like a straight line up. Key takeaway from our Space Capital Summit was that the rate of growth of satellites in orbit is now greater than Moore's Law. It's happening faster than Moore's Law. It's a straight line up and somehow when Starship comes online, it's going to accelerate.

So, it used to be a nice to have. You used to be able to this was elective to, think about yourself in relation to the others around you in orbit. Space traffic management and coordination. It's going to go from elective to essential. And that's going to happen this year. I think there's just too much going on.

SpaceX alone has 7000 Starlink satellites in orbit. The Chinese are launching a similar number of satellites and we've got all this growth that we talked about these other areas. Right. Like this is a key area of of of opportunity, of focus and, and a place where we've deployed quite a bit of capital, into solutions here. So this is definitely an area to watch.

Chad Anderson

One other one that I think is, is is timely and important is particularly with what's going on with the with the fires in LA. Is around, private capital stepping up. So I think there's going to be a real shift in climate policy with this new administration. And that creates an opportunity for private capital to step up and fill the gap, as it did in the prior administration and as it's, it's been doing and, and will continue to do so.

One, great capability that came online, last year was MethaneSat a very sophisticated, very capable satellite funded by the Environmental Defense Fund to track methane emissions. From a global perspective, this is the first satellite of its kind, before this was independently reported. So this is a super important capability. A lot of the the people who built that satellite are now over at Muon, a portfolio company of ours.

And Muon is, part of the Earth Fire Alliance building FireSat, a next generation, you know, step change capability, being able to detect, fires the size of a small classroom within 15 minutes anywhere on the planet. And this is, a great initiative. They're building very exquisite, very, sophisticated satellite constellation to be able to do this.

And they're doing it in partnership with, you know, Google.org, the Environmental Defense Fund, the More Foundation. And so, what's happening in LA is devastating. And, we need better solutions. We have the capability and the power to build these solutions. And we are proud to, to back and support companies that are, that are doing this.

I mean, because, extreme weather events are only going to increase. And we are again, two weeks into the year and we're already seeing this play out. It's not just the wildfires, it's the hurricane winds that are, you know, making it much worse. And so we're going to see this again throughout the year, straining insurance markets. And we need solutions. And it's great to see some of that coming online. So anything else to add for 2025?

Justus Kilian

I mean, the sensors in that specific situation, the sensors are absolutely critical to developing a foundation of sort of truth and you know, understanding of what's happening. But, you know, the the insurance market is where we're actually seeing the real price and the consequences of everything sort of happening, whether it be flood or fire or wind and, you know, portfolio company of ours, Arbol is doing incredible work.

They're bringing parametric insurance and new data to the market to be able to better understand, quantify this risk and, be able to sort of insure against it. And so, it's it's important to understand where things are happening, have the information and insights to be able to respond in a timely manner. But then on the application side, have the sophisticated financial products and tools to actually be able to, measure that risk, quantify it, and sort of, manage it in a thoughtful way.

And so, you know, a consequence of, the campfire earlier in California has meant that a lot of homeowners, you know, in LA don't have insurance, right? They just couldn't get it in new purchases. And so, you know, it's going to have a significant toll on a lot of people's lives as a result.

Chad Anderson

Yeah. Before we go, one other thing that's, really important to talk about for 2025 and going and beyond is spatial intelligence. You have some thoughts on that that you could share?

Justus Kilian

Yeah, I think so. You know, with so many new sensors and so much new data coming online, you know, there is, a need to be able to better process, better structure and better manage this information. And so you're actually seeing, you know, a lot of innovation happen in this area. From the new planet satellites that were launched with Nvidia Jetson chips to be able to make intelligent decisions at the edge to, you know, companies like Lumen Orbit raising capital to be able to actually build data centers in space, you know, to new processing techniques down here on Earth that allow us to process very large volumes of data at scale, in a cost effective manner. And, one area I'm particularly excited about is, the way that these sort of transformers, could be applied to spatial data. And, so far our large language models and multimodal models, you know, have been really designed to sort of, from a, from a language perspective to derive intelligence and understanding and relation and correlation amongst, you know, that sort of tech space foundation.

But there really is an opportunity to start doing that from a location centric approach, from a spatial centric approach, leveraging a wide variety of sensors. And so there's a couple, you know, unique sets of companies and technologies that are doing some great work in this area. Wherobots raised, you know, a pretty large series A earlier this year. They brought on Matt Forrest from Carto, and, you know, they're trying to build sort of this spatial intelligence cloud.

And, I think that they're going to have a pretty unique and sort of democratizing effect, within the fortune 500 sort of universe, that that could be, a step change in how companies and a broader set of users can start to leverage a benefit of this data. And, you know, we've made a new investment in this area and are really excited about the potential there.

And so, you know, I get the chance to tell more about that. It'll be really exciting. But, that's certainly a big area, an exciting area that lowers the barriers to access to incredibly powerful insights and, you know, potentially see that inflection in that curve to, you know, $1 trillion industry within the geo world.

Chad Anderson

So much valuable data that you absolutely have to use AI to, derive useful insights from. So this is a really important, interesting moment in time for spatial intelligence. Cannot wait to be able to talk more about this investment of ours so. Great. I think we'll call it there. The data from this report, we have made it, available on our website, in an interactive format. You can slice the data, slice and dice it in a bunch of different ways. Look, by continent, by country, different time periods, by, you know, if you're only interested in, in looking at space infrastructure, you can slice it that way.

If you are interested in how that infrastructure is being used, and understand what's going on in the application of this, space based data, you can slice it that way, you can slice it by industry launch satellites, these emerging areas. So, you can get a lot of really interesting insights into where the capital's going, where what startup, activity and investment trends look like.

So, I encourage you to go and check that out. And with that I would just say thanks again for joining us. It's always good to have you here. And we will, talk to you again. At the end of Q1.

‍