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Good morning. In an unexpected report yesterday, the US Army Corps of Engineers blocked SpaceX’s expansion of Starbase. The company hadn’t provided all the information needed for approval. Looks like we’ll be waiting a little longer for the maiden orbital attempt of Starship/Super Heavy.

In today’s newsletter…
💸 Space startup update
🤝 The contract report
💫 Return to Space

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  BryceTech Releases Report on the State of Space Startups

Graph: BryceTech
Graph: BryceTech

BryceTech has released its 2022 report on the state of space startups. 2021 saw record levels of investment and a record-breaking number of deals funneling into space tech. 

By the numbers:

  • The startup space sector saw $9B in venture capital investment, an 82% increase YoY.
  • There were 120 total VC deals, up 52% YoY.
  • Overall, $15.4B in financing funneled into the space sector in 2021, vastly overshadowing the previous record of $7.7B in 2020.
  • 241 startup space deals were made in 2021, with 596 investors backing 212 companies and a $64M average check size.

The rush of VC funding wasn’t limited to the space sector. Last year was a huge year of investment in general, fueled by low interest rates. VCs invested $330B across all industries in 2021, nearly doubling 2020 investment levels.

A SPAC-sized Elephant in the Room

$9B of the ~$15B total financing into the space sector came from VCs. The majority of the remainder came from the flurry of SPAC offerings in 2021. We followed 11 space companies that went public via SPAC in 2021: AST SpaceMobile, Redwire Space, Momentus, Spire, Planet, ArQit, BlackSky, Virgin Orbit, Rocket Lab, Telesat, and Astra. A handful of others made their de-SPAC announcements last year to be completed in 2022. One SPAC target, Tomorrow.io, called the transaction off, citing “market conditions” and a desire to remain private.

While SPACs help companies raise capital quickly, it subjects them to the volatility of the public markets. Space SPACs are down 35% on average, BryceTech reports.

  • The SEC has said it plans to crack down on overzealous SPAC projections. New companies hoping to come to market via SPAC may need to temper their expectations.

The forecast

Looking bright, but with some caveats. “To sustain levels of investment seen in 2021, space start-ups will need to assuage investor concerns related to unproven business models, uncertain customer bases, and the lengthy time horizons needed to achieve profitability,” per the report. 

Translation: Investors expect returns. If that doesn’t happen, it could have a chiling knock-on effect on financing available to private space companies of all sizes. In the coming years, BryceTech analysts expect a shift from development and deployment fueled by investment to “business-supported operations.”


In Other News

  • SecDef Lloyd Austin told US lawmakers that the Pentagon is pushing for resilience and more distributed architectures in space, which can be seen by its investments in missile warning/tracking systems, launch, secure SATCOM, and GPS.
  • Rep. Jason Crow (D-CO) asked Austin about “allegations of improper process” in the previous administration’s decision to move Space Command from Colorado Springs to Huntsville, AL. GAO and Pentagon auditors are reviewing the process, and Austin said the Pentagon would revisit the decision if improprieties were found. 
  • SpaceX was blocked from expanding the Starbase launch facility in Boca Chica by the US Army Corps of Engineers. The corps reported that SpaceX failed to provide all the information needed for approval.
  • Firefly and ICON, a NASA-backed 3D-printing company, are among the top Austin-native unicorns recently highlighted by TechCrunch. 
  • Lynk announced a successful “initial on-orbit check-out of” Tower 1. The satellite, which can communicate directly with unmodified phones, launched last month on Transporter-4.  
  • Astroscale plans to resume its ELSA-d debris removal demonstration mission soon. Four out of eight thrusters on the servicer are non-functional.
  • Bjarni Tryggvason, one of Canada’s first astronauts, passed away at the age of 76.

The Contract Report

  • Amazon (NASDAQ:AMZN) contracted up to 83 launches from Blue Origin, Arianespace and ULA to bring its Kuiper-Sats to orbit.
  • KSAT, OHB Sweden, and Thales Alenia Space have been subcontracted in an industry consortium for ESA’s Artic Weather Satellite mission.
  • SSTL, or Surrey Satellite Technology Ltd, signed a £22M ($28.8M) contract with the UK Ministry of Defense’s procurement arm for a 150kg satellite derived from the Carbonite+ spacecraft design. 
  • USSF’s procurement arm (formally known as Space Systems Command) is on the hunt for private sector space capabilities “as-a-service,” ranging from ISR to weather data (H/T SpaceNews). 
  • Hughes and OneWeb Technologies, a wholly owned subsidiary, signed a distribution agreement to provide managed LEO services to the DoD.
  • Spinlaunch and NASA have signed an agreement to develop, build and test a payload on the company’s Suborbital Accelerator Launch System.

  Netflix Releases Return to Space

Netflix has released Return to Space, a feature-length film chronicling the Demo-2 mission, directed by Oscar-winning duo Elizabeth Chai Vasarhelyi and Jimmy Chin. 

Since you’re a space-savvy bunch and Return to Space is nonfiction, it’s not really possible for us to reveal any spoilers here. You should check out the full thing yourself, but in the meantime, we’ll give a brief synopsis. Come for the backstory; stay for the interview with the mission’s spacecraft commander. 

1) Rocket interregnum. Two crews were tragically lost on the Space Shuttle, and by one estimate, it cost ~$1B/head to use the crew transport system to take astronauts to and from the ISS. Washington pulled the plug on the program, and in June 2011, the US lost the ability to launch its astronauts on American rockets from American soil. When the shuttle last flew, it was an emotional moment for the nation, NASA’s rank-and-file, and astronauts alike. “I didn’t know if I was ever gonna fly again,” says Doug Hurley, who flew on STS-135, the very last flight. Alas…

2) A bumpy ride. Return to Space alternates between the interregnum and SpaceX’s fits-and-starts progress toward the world’s first privately funded orbital-class rocket. After SpaceX achieved early success with cargo transport—and the shuttle was phased out—senators, industry players, and even Apollo-era commanders lined up against the proposition of funding private ISS crew transport. “People went bats*** crazy on us,” ex NASA Deputy Administrator Lori Garver tells producers. 

3) Inside access. Vasarhely and Chin had an audience with Elon, NASA management, and SpaceX’s top brass, showing the emotional lows, the expletives, and more. Return to Space follows Demo-2 astronauts Bob and Doug (aka Robert Behnken and Douglas Hurley) and their families. Bob and Doug famously were the first to fly private with SpaceX. Their wives, Megan McArthur and Karen Nyberg, respectively, are current and retired astronauts, respectively. Both couples graduated from NASA’s Astronaut Candidate Class of 2000, and in total, the four have spent a combined 430+ days in space. 

So…what’s it like? We spoke with Doug and Karen about living in LEO, flying private, and chores at the space station. Read the full convo here.


The View from Mars

A layer of dry ice forms on Mars. Image: NASA