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Investing Apr 22, 2022

NewSpace: The Next Investment Frontier

The commercial space industry is taking off!

By Accrete Team

The commercial space industry is taking off with opportunities in tourism, satellite constellations, rockets and space flight, and asteroid mining, among others. Over the past decade, space entrepreneurship has accelerated; no longer is space exclusively the domain of governments. The new space economy is being opened by private companies, and Morgan Stanley says it could be worth $1 trillion by 2040. And the profits for first movers may be substantial. 

While national governments have historically led space exploration efforts and continue to be major backers of innovation and exploration, private industry is increasingly commercializing space and providing solutions to companies and government space agencies themselves. In 2021 alone, investors poured nearly $15 billion into privately-backed space infrastructure companies like SpaceX and Sierra Space. While Morgan Stanley places the current revenue generated by the space industry at $350 million, they predict that this number could reach $1 trillion by 2040. 

On the back of advancements in technology and new scientific discoveries, we’re just beginning to see the many investment opportunities available in the space economy, and it isn’t too soon for investors to begin exploring the sector. Here’s what investors need to know about the space economy:

What is the space economy?

The space economy encompasses all activities and industries that advance the research, development, and utilization of space. It’s comprised of two sectors, as defined by the Harvard Business Review

  • Space-for-Earth: goods or services produced in space for use on earth 
  • Space-for-Space: goods and services produced in space for use in space

While space-for-Earth has offered the most investment opportunities thus far (think telecommunications, satellites, surveillance, etc.), technological advancements in recent years have enabled greater space-for-space capabilities, opening up further opportunities to the private sector.

Second, what are some of the industries that are involved?

  • Travel & Tourism: Forget traveling globally. Space is the latest and greatest destination. In the last decade, the space tourism industry has taken off with both old and new companies developing the infrastructure to allow civilians to travel to space. SpaceX and Blue Origin—both privately-held companies—have started piloting recreational space travel products, as has Richard Branson’s Virgin Galactic. In fact, beginning in 2022, Axiom Space and SpaceX will partner to fly multiple tourist missions to the International Space Station. 
  • Infrastructure & Real Estate: With growing funds being directed towards the space economy, the manufacturing of spacecraft and other technology is at an all-time high, as is the need for dwellings, space stations, and laboratories. Private companies are now filling in where governments once reigned supreme. Just last year, NASA awarded Blue Origin $130 million for a new commercial space station, which will ultimately replace the International Space Station.
  • Mining: Both the moon and the asteroid belt between Mars and Jupiter present enormous opportunities to mine rare earth minerals. In 2021, NASA valued the asteroid belt alone at $700 quintillion dollars. With the advancement of space-for-space manufacturing capabilities, vital to acquiring these incredibly valuable resources, the private sector is gearing up to reap the benefits. The legal ramifications of mining of “celestial bodies” are being explored in depth now, and Goldman Sachs argued back in 2017 that asteroid mining would one day create the world’s first trillionaire.

Now that you have the basics down, consider taking advantage of all the investment opportunities the space economy has to offer. The private markets are driving the new era of space innovation, and you deserve a share of the future.

At Accrete, we’re focused on unlocking a new era of wealth generation for average investors. That means identifying and sourcing the most lucrative investment opportunities – spanning all industries, even those out of this world.

Last updated April 25, 2022
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