Investment banks, venture capital firms tapping into burgeoning space industry

OPINION: Venture capitalist Benjamin Chong says investment banks and venture capital firms are paying close attention to start-ups operating in the state and country’s burgeoning space industry.

Benjamin Chong from Right Click Capital. Picture: Tricia Watkinson

Last year’s announcement that Adelaide would become home to the new $41 million Australian Space Agency is expected to provide a launch pad for local business to tap into the global space industry.

The Morrison Government anticipates the investment in the space agency will triple the value of Australia’s space economy to $12 billion and generate close to 20,000 new jobs over the next decade.

All this indicates a very promising future for the space economy in Australia, following the footsteps of its global counterparts.

Late last year, delegates from private space companies met with investors at Morgan Stanley’s inaugural Space Summit in New York. The investment bank is strongly hinting the space economy will very soon command a growing slice of investment portfolios.

How? The stratospheric growth of the industry is spurred on by the growing application of space technologies and data in our everyday life. It plays a pivotal role in essential services such as telecommunications, emergency management, weather forecasting, agriculture, resources, environmental management and national security. Furthermore, we have seen knock-on effects such as hedge funds’ growing interest to buy data from satellites for information in certain areas like crop yields to make investment decisions.

In addition to this demand, the proliferation of small satellites will intensify as manufacturing costs continue to fall. Myriota – one of our Australian portfolio companies – has produced a nanosatellite that has the same capability of larger satellites to provide valuable information to various Australian government departments. For example, Myriota’s work with The Australian Institute of Marine Science (AIMS) uses satellite connected sensors to keep a pulse on Australia’s oceans by tracking currents, sea surface water temperatures and barometric pressure.

Up until now many commentators would consider Australia running at the back of the pack in the space race.

However, with the government’s space agency investment now a reality, we can expect to see an acceleration in our space capabilities. And, it would appear that SA is rapidly becoming our centre for space excellence.

New space company Southern Launch has said it will begin developing the infrastructure and support to deploy nanosatellites from the Eyre Peninsula, while British billionaire Richard Branson is reportedly eyeing off SA as the launch site to take the first of his paying passengers aboard the Virgin Galactic into orbit.

With a burgeoning space industry set for take-off here in Australia, we expect large investment banks and VC firms like us to look more closely at space start-ups in the future.

Space talent in Australia is exceptional and the space agency is exactly what is needed to bring together major corporations and start-ups, researchers and investors, as Australia prepares to take its next giant leap in space innovation.

Benjamin Chong is a partner at venture capital firm Right Click Capital.