Space Angels – Space Investment Quarterly

SPACE INVESTMENT QUARTERLY

Q4 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 Wof 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.

3 © Space Angels 2019 Front cover image courtesy of Spaceflight Industries DAWN OF THE ENTREPRENEURIAL SPACE AGE FULL YEAR 2018 EQUITY INVESTMENTS

Equity Investments From 2009 To Present

Governmental Entrepreneurial NUMBER OF INVESTMENT AMOUNT Space Age Space Age ROUNDS

1969 2009 2010 2012 2014 2015 2018 $18 B Apollo landed SpaceX first SpaceX SpaceX Dragon NanoRacks SpaceX SpaceX Cumulative successful publishes becomes first launches lands orbital Falcon Heavy 175 on the moon Investment in launch of launch prices; commercial commercial booster, unlocks Space1 commercial introduces space vehicle to deployment ushers in commercial payload market berth with ISS via ISS reusability deep space EARLY-STAGE3 $2,972,167,715 transparency operations INVESTMENT 250 Companies $8.3 B Satellites BY STAGE 412 $15 B 77 Companies $690M Number of $8.6 B Investment Amount Round Share Launch Companies Receiving $1200 M 1 EARLY-STAGE Investment 5% 3% 35 Companies ROUNDS $1000 M Media & $15 M Education $800 M 18% 13 Companies 300 126 47% $515 M $600 M Biosphere $10 B $400 M 11 Companies 25% $154 M Industrials $200 M

Seed Series A Series B 8 Companies 200 $77 M Seed Series A Series B Series C Late Stage4 Other5 Series C Late Stage Other Information & Research Q4 Series B investment tripled Y/Y, continuing the strong Early-stage (Seed and Series A) rounds 8 Companies growth seen in Q3. The largest Series B rounds in the account for 72% of total investment $244 M Planetary quarter went to Small Launch companies Vector+ ($70M) rounds in 2018. Series B rounds made Markets and Landspace ($43M). up 18% of total investment rounds in $5 B 2018, up from 6% in 2017. Growth at this 10 Companies 100 $147 M stage was driven by the Satellites and Logistics Launch industries. BY INDUSTRY

1969 1983 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Investment Amount Round Share

$1600 M

$1400 M 3% Investment Source Investment Location 3% 3% 23% $1200 M $5 B Angel/Individual $1000 M Venture Capital $4 B Corporate 7% United States $800 M Other2 5% United Kingdom $600 M 8% $3 B France 64% $400 M China

$2 B Singapore $200 M 20% 57% Launch Satellites Industrials Logistics

Canada Planetary Markets Biosphere Information & Research Other Launch Satellites Planetary Logistics Industrials Info & Biosphere Media & $1 B Markets Research Education

The Launch and Satellites industries continue to attract In Q4, we observed the familiar trend of the most investment dollars, with $1.6B and $1.2B in Launch receiving the most investment 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018, respectively. However, we did see significant dollars and Satellites generating the The U.S. continues to lead global investment in Space, investments in Planetary Markets, Logistics, and most activity through rounds raised. Total investment in Q4 increased 55% over Q3, driven by growth accounting for 57% ($9.6B) since 2009. However, Q4 Industrials this year as the world sets its sights on the It’s worth noting that we recorded in Venture Capital and Other (primarily Private Equity and Mutual saw increased global participation with significant moon and prepares for more commercial activity in investment activity across all industries Fund) inflows. investments in Chinese, German, Singaporean, and Earth orbit. in the space economy this quarter. Canadian companies. 1. Cumulative non-governmental equity investment 3. Early Stage is comprised of Pre-Seed, Seed, and Series A deals 5. “Other” includes non-traditional investments and self-financing from Jeff Bezos, Robert Bigelow, Richard Branson, and Elon Musk, who we have classified 4 2. Other includes Foundations, Private Equity, Sovereign Wealth Funds, Mutual Funds, Crowd Platforms, etc. 4. Late Stage is comprised of Series D+ and Liquidity Rounds as individual investors providing large investments (hundreds of millions) in their own companies during unclassified round. 5 + Denotes Space Angels portfolio company INVESTMENT ACTIVITY VENTURE CAPITAL ACTIVITY

Select Space Angels Portfolio Fundraising Full Year 2018

COMPANY ROUND AMOUNT LEAD Venture capital investment in Space is now a generally accepted investment theme, so to better

SpaceX Liquidity $500,000,000 Fidelity Investments 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. SpaceX* Undisclosed $273,199,776 Baillie Gifford Based on this definition, our research shows that since 2009, venture capital funds have invested $4.2B Vector Launch* Series B $70,000,000 Kodem Growth Partners, Morgan Stanley into s pace companies, with 70% of that capital deployed in the last three years. In 2018 alone, 114 ICEYE Series B $35,000,000 True Ventures VC funds made their first space investment, bringing the total number of VCs with a Space investment

World View Series C $26,500,000 Accel Partners 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% This quarter, five Space Angels portfolio companies raised capital. SpaceX+ closed $273M of a $500M round. At a $30.5B valuation, this makes of the Top 100 firms9 now have one or more space investments. 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 Cumulative Number of Venture Funds Investing in Space

COMPANY ROUND AMOUNT LEAD Pre-2009 534 500 Space Angels Data Collective Benchmark Capital Foundry Group SpaceX Liquidity $500,000,000 Fidelity Investments Draper Fisher Jurvetson (DFJ) Promus Ventures First Round Capital Shasta Ventures Founder’s Fund Accel Partners SpaceX* Undisclosed $273,199,776 Baillie Gifford 400 Founder Collective Index Ventures RRE Ventures Andreesen Horowitz Greycroft Kleiner Perkins Sequoia Playground Global Thrive Capital Global Eagle Liquidity $150,000,000 Searchlight Capital New Enterprise Associates (NEA) True Ventures 300 Norwest Venture Parters Canaan Partners Spaceflight Inc. Series C $150,000,000 Thales Alenia, Telespazio, Mitsui Lux Capital Box Group GGV Capital Bessemer Venture Partners Lightspeed Venture Partners Rocket Lab* Series E $140,000,000 Australia Future Fund Spark Capital 200 500 Startups SV Angel Felicis Ventures Greylock Capital Thermo Companies Liquidity $100,000,000 Thermo Capital TechStars 100 Khosla Ventures Y Combinator iSpace Series A $90,225,000 Matrix Partners China

HyperSat Undisclosed $85,000,000 Incentrum Group 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 One Space Technology Series B $70,112,793 CICC Jiatai Equity Funds 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, Vector Launch* Series B $70,000,000 Kodem Growth Partners, Morgan Stanley bringing the total to 534. Accel Partners, Andreessen Horowitz, and Playground Global were three notable first-time Space investors this year.

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. Percentage of Venture Capital Rounds by Stage

Series C+ Top Exits Full Year 2018 Cumulative Exits by Sector 114 rounds $40 B SELLER BUYER AMOUNT Satellites Launch Orbital ATK Northrop Grumman $7,800,000,000 $30 B 102 rounds Industrials Series B Tencate Advanced Composites Toray Industries $1,150,000,000 Biosphere $20 B Hispasat Abertis $373,000,000 Media & Education

Sea Launch S7 Group $150,000,000 $10 B Globecomm* Speedcast $134,000,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 67 rounds Series A 63 rounds In Q4, Speedcast completed its $134M acquisition of Globecomm to Exits remain driven by Satellites, given that this is an established strengthen the company’s remote communication offerings in the maritime market with scores of new companies coming online and many and enterprise sectors. Additionally, Q4 saw the acquisition of two Earth cash-rich incumbents looking to outsource innovation to Space Seed 8 Observation companies: Tellus Labs was acquired by Indigo Agriculture, ventures. However, 2018 did see a very significant Launch exit 35 rounds an AgTech company hoping to incorporate Tellus Labs’ flagship product, with Northrup Grumman’s $7.8B acquisition of Orbital ATK. Kernel, into its agronomic intelligence platform for farmers. Planet acquired 2014 2015 2016 2017 2018 YTD Boundless Spatial, an open-source GIS software provider. The deal allows Planet to expand its business with the U.S. Government. 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.

6. Source: CNN * Asterisk denotes activity in Q4 2018 9. Determined by fund size, excluding corporate venture funds and sector-specific funds 6 7. Deals listed based on totality of available data 7 8. Source: Wall Street Journal

VENTURE CAPITAL ACTIVITY 2009-2018

Planetary Markets

Heavy Launch

7 rounds $2.5B

Logistics

Industrials Earth Observation180 rounds Positioning, Navigation, Timing Biosphere $3.5 B Undisclosed Communications Manufacturing & Components Series C+ Planetary Small Launch $2.0B Operations & Ground Segments $3.0 B Markets 60 rounds Series B Earth Observation

Series A Media & Launch Launch Brokerage $2.5 B Education 72 rounds $1.5B Heavy Launch Seed Small Launch $2.0 B Info & Research

Positioning, $1.0B $1.5 B Navigation, Industrials Timing Satellites 24 rounds 335 rounds $1.0 B Logistics $500M

$500 M Launch Communications35 rounds

Manufacturing Satellites & Components

2009-2011 2012-2015 2016-2018 Early Stage Growth Stage Late Stage 53 rounds Satellites Launch Planetary Industrials Logistics Markets

Operations & 43 rounds

Ground Segments

Venture Capital Investment Amount by Round Venture Capital Investment Allocation by Venture Capital Investment Rounds by Venture Capital Investment Amount by Over Time Stage and Industry Industry and Sector Industry and Sector

Since 2009, venture capital firms have invested $4.2B into space Our data shows that the number of VC rounds at Growth and Late Stages Since 2009, VC firms have participated in 455 investment rounds, Consistent with the overall flow of capital into the space economy, VCs companies. VC interest in Space has hit an inflection point in the last are concentrated within the Satellites (63%) and Launch Industry (28%). of which 114 (25%) occurred in 2018 alone. Of the total, 355 (74%) have focused primarily on the Satellites and Launch industries. However, three years, with 70% of capital being deployed from 2016-2018. During However, at the Early Stage (Pre-Seed, Seed, Series A) we see a much rounds were in the Satellites industry, of which 180 rounds (54%) VCs appear more overweight in Satellites. Since 2009, investment into this period, investment has been concentrated at the Series A and Series greater diversity of industries represented. We believe this dynamic shows were in the Earth Observation sector, with the other 175 (46%) split the Satellites industry represents 57% of total capital deployed by VCs, B rounds, accounting for 60% of total capital deployed. that as the Satellites and Launch Industries mature, and VC portfolio amongst Manufacturing & Components, Operations & Ground Segment, compared to 46% of total capital deployed by all investor types. companies graduate, VCs are expanding their space exposure to include Communications, and PNT. The Launch industry accounted for 72 other industries. rounds (16%) of total VC investment, with 60 rounds (83%) going to the Of the $2.4B deployed into the Satellites industry, $0.9B (40%) has gone to Small Launch sector. Just 48 investment rounds (11%) went to emerging companies in the Earth Observation sector. We suspect this sector is more industries like Industrials, Logistics, and Planetary Markets. 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 TOTAL VENTURE CAPITAL INVESTMENT UNIQUE COMPANIES RECEIVING INVESTMENT TOTAL NUMBER OF VENTURE CAPITAL INVESTMENT ROUNDS 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 $4.2B 222 455 business models, benefiting from the growing smallsat market.

NUMBER OF TOP 100 VCS WITH 1+ SPACE INVESTMENT SHARE OF COMPANIES RECEIVING VENTURE CAPITAL INVESTMENT EARTH OBSERVATION’S SHARE OF TOTAL ROUNDS 41% 54% 40% 8 9

2018 was another remarkable year for space. With an additional $3.0B of equity investment, OUR METHODOLOGY 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 COMPANIES TRACKED ROUNDS CATALOGUED EXITS CATALOGUED 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 1,480 903 167 space is growing rapidly, with 70% of venture capital’s total $4.2B investment deployed in just Space Angels launched the Space Investment Quarterly in October 2017 with the aim of uncovering the last three years. The Space Angels team is evaluating high-quality investment opportunities insights about investing in the space economy. The data shown in this report is gathered from a from around the globe and across all sectors - particularly in robotics, secure communications, number of sources across many categories, and no single piece of data can be added to our databases and deeper in the satellite value chain. As we look forward to the Year of Commercial Space until confirmed by multiple sources. Our reported data is subject to change over time as previously Travel, we invite you to join us as we fuel the future. undisclosed deals are added to our database. Below is a select list of our data sources:

SELECT PORTFOLIO MILESTONES Investment Crowd Confidential Public News Databases Platforms Sources Announcements Astrobotic named one of nine companies in the NASA Commercial Lunar Payload Services Program, • Pitchbook • AngelList • Diligence Process • Press Releases • TechCrunch with participants eligible for up to $2.6B in awards over the next ten years • Crunchbase • SeedInvest • Company Management • SEC Filings • Bloomberg • Mattermark • Kickstarter • Co-Investors • Events • CNBC The FCC approved SpaceX’s Starlink constellation, the first time the FCC has allowed a U.S.-licensed • CB Insights • Indiegogo • Commercial Partners • Fortune • Government Partners • SpaceNews 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) ABOUT Space Angels is the leading source of capital for early-stage space ventures. Founded in 2007, our ICEYE receives a €10M grant from Business Finland, a Finnish trade and economic development agency 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 Kepler Communications received approval from the FCC for its 140 Ku-band satellite constellation intelligence to its accredited investor members, making it easy to discover, select, and invest in the most compelling space startups. ADDITIONAL RESOURCES

The Space Angels Podcast regularly interviews Information Central dives deeper into the ASSETS CONTACT commercial space entrepreneurs and industry commercial space economy covering major All charts and tables from this report are available for Media Inquiries experts, providing insight into the opportunities sectors, innovative technologies, and public- download. This work is licensed under the Creative [email protected] and risks of early-stage space investing. private partnerships. Commons Attribution-NoDerivatives 4.0 International License, which means content cannot be altered from its Data and Investment Inquiries original form and must include Space Angels attribution. [email protected] Click here to view a copy of this license. Are you ready to invest in the most compelling space startups?

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