A NEW SPIRIT OF SPACE VENTURE CAPITAL? RECENT TRENDS IN THE FINANCING OF THE US SPACE INDUSTRY

Abstract

For at least a decade now, the United States has witnessed a shift in the financing of space activities. At first hesitant, then increasingly significant, investment from venture capital has influenced the trajectory of private space. Venture capital is one of the driving forces behind what has been termed “New Space”. However, it is not only a source of financing to complement other funding sources. The introduction of venture capital goes hand in hand
with the popularization of approaches to entrepreneurship that are intended to be considered more innovative and ambitious. Although achieving the most profitable returns on investment is a priority, the financiers behind space “2.0” also seek to influence directly the development of the start-ups they are willing to support. Founders of companies claiming to be part of the New Space “paradigm shift” are following their example and seeking to persuade these new supporters that their business promises are credible. While the business ideas may not always work out, success stories abound in the space applications market that can be converted into tens of millions of dollars for investors. The impact of this financialization of space is growing throughout the establishment, including both NASA and large aerospace firms. The organisations have created venture capital structures. While these organisations remain relatively marginal in size, the influence of the venture capital way of thinking is increasing and the model of entrepreneurial activity is growing in importance. This contribution, based on public data and observations carried out during a research project on the emergence of the New Space in the United States, proposes to identify, define and contextualize these evolutions. We examine the challenges posed by the expansion of private space finance. While we do not come to a conclusion about whether these trends in the space capitalism are inevitable or necessary, this overview contributes to the critique of the political economy of contemporary space.