On the 10th of April this year, four astronauts splashed down in the Pacific after flying around the moon. It was the furthest humans had been from Earth in over fifty years. NASA called it the opening act in America’s return to the lunar surface; the news cycle focused on whether the loo was working.
What I thought about wasn’t the mission or the plumbing, it was how the space industry has changed over those five decades.
As Artemis II pilot Victor Glover put it: “We call amazing things that people do ‘moonshots’ for a reason.” Building rockets used to be the preserve of national space programmes. It was the work of governments, defence budgets, research agencies, and a product of Cold War supremacy. Now, it increasingly sits in the hands of a few private aerospace companies with the ambition, capital, and impatience to own the entire stack.
That matters if you’re trying to back the next generation of space companies.
We’ve been here before
The original space race saw the US and Soviet Union face off in a show of technological superiority and political posturing. It was dressed as a science and exploration, but it was also a contest for control. Who could get there first? Who had the better technology? Who could make the rest of the world look up and take notice?
The new space race looks far more commercial, but I’m not sure it’s that different.
SpaceX is the obvious example. It doesn’t want to be a supplier to the space economy; it’s actively trying to become the infrastructure it runs on. Launch, spacecraft, propulsion, communications, orbital services, data, and whatever commercial layer comes next. This is a company that wants to own everything, from ground to orbit.
That creates a strange problem for early-stage investors like us. In most areas of deep tech, you can back a company building a critical layer of the stack. Whether that’s a better chip, new sensor or breakthrough material; it’s immaterial. If the tech works, it can usually be sold into several markets and several customers. In the space economy, it’s not that simple.
Space is cold and unforgiving
In the vacuum of space, customers are few and sales cycles lengthy. The capital required is serious and the number of companies that can buy from you is smaller than the size of the market would have you believe.
There’s also an awkward question to ask: if you are only building part of the stack, how much value can you really capture? Let me take a detour into robotics as an example of the problem many space tech companies face.
A robot needs vision, sensing, mission planning, hardware, actuators, software, and some way of turning that into a finished product a customer wants to use. You might build one essential part of that system, but the person who often captures the most value is those putting it all together, a systems integrator. It’s likely they don’t own any of the technology, but they package it and sell the end use.
The space economy is remarkably similar. You might have a propulsion system, a chip for satellites, a robotic arm or a data compression algorithm that works beautifully. But a truly elegant piece of engineering isn’t enough to build a £1Bn+ company alone, as you may only be a component in the stack. The real value goes to the company launching the satellite, delivering the service, and owning the customer relationship.
Take Planet Labs as an example. It isn’t valuable because it owns clever satellite components. It’s valuable because it owns an Earth observation constellation and the customer contracts that sit around that. If it was just selling its unique sensor into other satellite operators, it wouldn’t be worth the $14Bn in market cap it is today.
Why good engineering isn’t enough
Space is awe inspiring, so naturally the technology being built to work there is equally impressive. It survives in an environment that humans weren’t designed for, using the very best engineering, but that doesn’t necessarily mean it’s defensible.
Sometimes the “tech” isn’t that deep. It might just be good engineering.
That’s not a criticism, it just presents a problem from an investment perspective. A space company at seed or Series A needs a lot more than elegant engineering. Even if they do have the perfect toilet for the 2027 Artemis mission, it must be a technology that can’t be copied. If the thing you’re building can be copied, built internally, or undercut by a competitor, technical quality alone isn’t enough, regardless of how well it flushes.
So, the question isn’t simply: can this be built?
It’s: can this stay valuable once everyone else understands what is being built?
Stuck in the middle
The space tech market isn’t big enough when it comes to the number of serious buyers operating in it. Venture-scale companies whose model hinges on selling into other space businesses will struggle to reach the scale needed to be attractive to investors who are willing to take the risk.
If your customer is another space company, and their customer is the government or an enterprise, then you may be too far away from the money. Useful, necessary, but stuck somewhere in the middle with limited pricing power.
The companies that feel most interesting are those that own the end customer relationship. Government, defence, and enterprise all come with large problems and larger budgets available to pay a company to solve those problems.
For component companies, the bar is much higher as the technology must be genuinely proprietary. The advantage must be hard to replicate and the company needs a reason to exist independently rather being acquired early, copied, or priced into oblivion. It needs a reason to keep the value it creates.
Who wins?
Space tech and aerospace attract some of the most ambitious founders in deep tech. There are areas where the market is opening rather than closing, but the spectacle of the category can lend a rose-tinted lens to those that attempt to enter.
To invest in space is to remove those glasses and see it for the commercial beast that it is: hard physics, significant capital, government procurement that still matters, and a small number of very large private companies that may decide where money is made.
The original space race gave us moonshots, but it also taught us that power concentrates. Getting there first mattered as it meant owning the narrative, capability, and the next phase of the market.
Success in the new space race will be with those that are best placed to capture value. That value is more likely to sit with the company that owns the system, owns the customer relationship, and gets paid for the outcome.
That’s who wins the space race, and it might not even be a moonshot.