Its been impossible to ignore the major strides that have taken place in space exploration in 2020, including the launch of the UAEs Hope probe and the first launch of astronauts from US soil to space in more than a decade. The number of satellites deployed in space is increasing quickly, as rockets become cheaper and more reliable, while space tourism operators are set to begin regular operations in the near future.
So, its no surprise that investors are taking notice. Many of the biggest names in tech including Elon Musk and Jeff Bezos are active in the field with their own companies. And in the UAE, Mubadala Investment Company is a prominent investor, including ownership of Yahsat, a UAE satellite operator, stakes in Virgin Galactic and major investments in venture capital funds that have a focus on space.
But we could be on the cusp of even greater opportunity, with Morgan Stanley estimating that by 2040, the global space economy could generate revenues worth $1 trillion (Dh3.67tn) by 2040, up from $350bn currently.
Experts in space investment point to a number of technical catalysts that are helping to turbocharge the sector. The invention of the CubeSat small satellites weighing as little as 1.33 kilograms that are placed in low Earth orbit and the increasing power of off-the-shelf electronics have lowered the barriers, says Tess Hatch, vice president at Bessemer Venture Partners, which has made major investments in space companies, including Rocket Lab.
As governments ramp up their spending on space exploration and defence, including the establishment of the United States Space Command, it is creating an additional flow of money to private contractors, says Andrew Chanin, chief executive of ProcureAM, which offers a space-focused exchange-traded fund (ETF).
Overall, the scale and ambition of some private companies are breathtaking, from space tourism and supersonic point-to-point travel to plans to colonise planets, mine asteroids for precious metals, produce lunar rovers or print 3D rockets.
As people become more aware of how much space plays a role in our everyday lives, they might start considering the importance of having space exposure in their own investment portfolios
Andrew Chanin, CEO of ProcureAM
Still, a large segment of space technology is focused on providing services to Earth dwellers including GPS, satellite television, high-speed internet and other communications services, or gathering data on weather, agriculture and other applications using sensors on satellites.
People havent fully grasped the importance of how space technologies are already affecting our everyday lives today and how it may affect them in the future, says Mr Chanin. We believe that as people become more aware of how much space plays a role in our everyday lives, they might start considering the importance of having space exposure in their own investment portfolios.
GPS is the best example of a transformational space technology that has been put to good use by tech companies. Developed by the US military and made available for civilian applications, GPS is today used to provide location-based services on our smartphones and wearable devices powering everything from Google Maps to ride-sharing services such as Uber to Pokmon Go.
The goal for investors is to identify the next set of space technologies that can deliver value creation on the same scale as GPS, says Chad Anderson, managing partner at Space Capital.
The greater number of satellites in space and more available sensors are creating new opportunities in Earth observation, with demand coming from fields including agriculture or insurance, he says.
Meanwhile, demand for geospatial intelligence, which uses satellite and other sensors to gather data about the world, such as counting the number of ships in a major port to predicting trade volumes, is growing rapidly.
This is especially true as Covid-19 creates a more uncertain outlook, according to Mr Anderson. We think that the opportunity in geospatial intelligence is going to be as big if not bigger than GPS or location-based services, he says.
Supplying high-speed internet via satellites is also expected to be a major growth market, especially in countries where internet services are slow or non-competitive.
Mr Musks SpaceX has launched about 600 low Earth orbit satellites, but has approval to launch as many as 12,000, each weighing approximately 260kg. It is aiming for near-global coverage of the populated world by 2021, according to the StarLink website.
Technologies developed for space exploration can also have applications on Earth. The UAE has already announced plans for a Mars colony by 2117.
While that goal may seem distant, many of the challenges around science and technology that will need to be overcome to establish a habitable human settlement on the Red Planet, such as securing food and water, are linked to challenges that the UAE faces today.
This is a point made by Elodie Robin-Guillerm, a partner at Gothams, an aerospace and defence accelerator that has a partnership with Hub 71 in Abu Dhabi to invest in early stage space companies and bring them to the UAE.
Thats why there is a lot of cross-sector development, and why you need partnerships between the government and the private sector to make this happen, she says.
The UAE is also rapidly developing as a hub for the space industry. This year, it passed a Space Law intended to bolster investment in the sector. The law not only provides a stable regulatory environment for investors, but also signals the seriousness of the countrys intent to develop the space sector, says Anna Hazlett, founder at AzurX, a space and technology consultancy in Dubai.
The Space Law is giving the UAE international recognition within the space sector. Space companies can start to operate here, and investors see this as a sensible, secure environment in which they can invest and they know that the regulatory framework is there, says Ms Hazlett.
So, if youre convinced space is the next big thing, how can you get exposure in your investment portfolio? The simplest way would be to include a specialised ETF tracking the aerospace industry, such as SPDR S&P Aerospace & Defense ETF. Its major holdings include Virgin Galactic, Northrop Grumman Corporation and Howmet Aerospace.
A more specialised choice is the ProcureAM Space ETF (its ticker is UFO). Eighty per cent of its index weight is allocated to companies that derive a majority of their revenue from space-related industries, including those utilising satellite technology, with names such as Trimble, Iridium Communications and Dish Network.
The fund tracks an index developed by space expert Micah Walter-Range, and includes two tranches of companies pure play space companies, such as Virgin Galactic, and diversified companies that receive some revenue from space.
Mr Chanin says the ETF can appeal to investors who want long-term exposure to the space sector, or those who are looking for short-term catalysts such as major government contracts.
But given the rapid pace of development, many of the investment opportunities are only available in private markets, whether to angel investors or investors in venture capital funds though successful companies are expected to eventually list on public exchanges.
When it comes to evaluating a potential investment in an early stage space start-up, Ms Guillerm says key considerations include the strength of its team and the commercial viability of its project, including time to market.
One thing that newcomers to the space investment sector can lack is a network to draw on, both for technical advice and assessing whether a company will be disruptive in the market they are targeting, she says. Space is a very large field, from upstream to downstream, and no one can be an expert in all of the sub-fields and sub-segments, she says.
That view is echoed by Ms Hatch, herself an aerospace engineer who has worked for Boeing and SpaceX, where she worked on integrating payloads with the Falcon9 rocket. Even with all our expertise at Bessemer, we hire independent consultants who have PhDs and deep expertise in the field, who dig in and understand every part [of a companys technology] before we invest, she says.
Investors may also need to be prepared to invest early, so look for founders who have a strong vision for their company as well as the technical expertise and intelligence to execute it, she adds.
If a company is involved in space exploration, theres definitely more risk attached to it. But thats where the opportunity is
Anna Hazlett, founder at AzurX
Other investment decisions include whether to target companies in the upstream space exploration activities or downstream, which are space technology companies providing services to Earth. Downstream companies that can generate recurring revenue quicker may be a safer bet, and especially those whose potential customers are in multibillion or multitrillion-dollar industries such as agriculture or the Internet of Things (IoT).
Companies that are focused on analytics or other services will likely also have a quicker route to market than a company that is trying to build its own hardware, and may require less capital to get their idea off the ground. Hardware at the end of the day is black and white it either works or it doesn't, says Ms Guillerm.
Companies involved in space exploration will likely be more risky, but the flip side is that if a company is successful in trying to do something that hasnt been done before, it can produce unique gains, says Ms Hazlett. If a company is involved in space exploration, theres definitely more risk attached to it. But thats where the opportunity is: if someone wants to take a risk as an investor, and it goes well, its going to be a great story.
One feature or risk of the industry is that despite the large amounts of venture capital invested to date, there have been relatively few exits whether initial public offerings or acquisitions. Space Capitals Mr Anderson puts this down to the relative newness of many companies in the sector, and the rule of thumb that it typically takes six to eight years for a company to be ready for an IPO.
Were right in the sweet spot now, where we [should] start to see one or two IPOs soon, he says.
Mr Anderson believes investments in space technology companies are no more risky than investing in general tech companies at a similar stage of development. I would say space might be even less risky than a more crowded area of tech given that theres so much wide open market opportunity here, he says.
Updated: September 7, 2020 05:00 PM
Continued here:
Is now the time to explore the final frontier of investing? - The National
- There Might Be Ocean World Planets Within the Milky Way, Planetary Scientist Claims - Science Times [Last Updated On: June 22nd, 2020] [Originally Added On: June 22nd, 2020]
- 10 Worst Movies By Great Horror Directors, According To Rotten Tomatoes - Screen Rant [Last Updated On: June 22nd, 2020] [Originally Added On: June 22nd, 2020]
- Space Perspective is a startup that wants to balloon you toward space - Business Insider - Business Insider [Last Updated On: June 22nd, 2020] [Originally Added On: June 22nd, 2020]
- Space Outside, Sexism Inside: Mary Robinette Kowals The Relentless Moon - Den of Geek [Last Updated On: July 13th, 2020] [Originally Added On: July 13th, 2020]
- Here are the three missions to Mars that are happening this month - CTV News [Last Updated On: July 14th, 2020] [Originally Added On: July 14th, 2020]
- My Coronavirus Summer 2020 Reading List - The National Interest [Last Updated On: July 16th, 2020] [Originally Added On: July 16th, 2020]
- U.A.E. Mars mission from Japan delayed again by weather - CTV News [Last Updated On: July 16th, 2020] [Originally Added On: July 16th, 2020]
- How Perseverance will Search for Life on Mars - The Planetary Society [Last Updated On: July 16th, 2020] [Originally Added On: July 16th, 2020]
- Teen's mission to be first person to walk on Mars - WISHTV.com [Last Updated On: July 18th, 2020] [Originally Added On: July 18th, 2020]
- The Expanse Season 5 Cast, Trailer And What Can We Expect? - World Top Trend [Last Updated On: July 19th, 2020] [Originally Added On: July 19th, 2020]
- Five Scientific Achievements That Happened During Coronavirus Lockdown - Smithsonian Magazine [Last Updated On: July 19th, 2020] [Originally Added On: July 19th, 2020]
- UAE Mars mission brings hope amid challenging year - The National [Last Updated On: July 19th, 2020] [Originally Added On: July 19th, 2020]
- Is there life on Mars? - The Economist [Last Updated On: July 22nd, 2020] [Originally Added On: July 22nd, 2020]
- Wilkin: Never a Saratoga opening day like this one - Times Union [Last Updated On: July 23rd, 2020] [Originally Added On: July 23rd, 2020]
- Flamingos in Abu Dhabi: are the birds thriving because humans backed off? - The National [Last Updated On: July 23rd, 2020] [Originally Added On: July 23rd, 2020]
- 10 things you need to know today: July 20, 2020 - The Week Magazine [Last Updated On: July 24th, 2020] [Originally Added On: July 24th, 2020]
- Guide to the classics: H.G. Wells' 'The War Of The Worlds' - The Star Online [Last Updated On: July 26th, 2020] [Originally Added On: July 26th, 2020]
- Colonizing our solar system will make our species very hard to eliminate - The Next Web [Last Updated On: July 26th, 2020] [Originally Added On: July 26th, 2020]
- Learning From Ben Franklin and Henk Rogers We Could Thrive - Newsmax [Last Updated On: July 26th, 2020] [Originally Added On: July 26th, 2020]
- Mars Lays Red Carpet: Three Earthly Visitors Take Flight Towards the Red Planet Within 11 Days - The Weather Channel [Last Updated On: July 26th, 2020] [Originally Added On: July 26th, 2020]
- Alyssa Carson: The teenager on a mission to Mars - Siliconrepublic.com [Last Updated On: July 28th, 2020] [Originally Added On: July 28th, 2020]
- Elon Musk drops details for SpaceX Mars mega-colony - CNET [Last Updated On: July 28th, 2020] [Originally Added On: July 28th, 2020]
- Planet Earth Report Global Pandemic is a Hinge in History to Havens for Ancient Alien Life - The Daily Galaxy --Great Discoveries Channel [Last Updated On: July 29th, 2020] [Originally Added On: July 29th, 2020]
- Weekly Digest (July 20-24, 2020): Top Weather, Environment and Science Stories of the Week - The Weather Channel [Last Updated On: July 29th, 2020] [Originally Added On: July 29th, 2020]
- February looks to be exciting month for Mars exploration - The Robesonian [Last Updated On: July 29th, 2020] [Originally Added On: July 29th, 2020]
- Man wanting to go to Mars isolates for 366 days in tiny home with 5 others as part of study - CBS17.com [Last Updated On: July 29th, 2020] [Originally Added On: July 29th, 2020]
- Top news of the day: Saifuddin Soz claims he is kept under house arrest without formal orders; Jaya Jaitly gets four years in jail in corruption case... [Last Updated On: July 30th, 2020] [Originally Added On: July 30th, 2020]
- To Infinity And Beyond - farmingdale-observer.com [Last Updated On: July 31st, 2020] [Originally Added On: July 31st, 2020]
- Man wanting to go to Mars isolates for 366 days in tiny habitat with 5 others as part of study - CBS17.com [Last Updated On: July 31st, 2020] [Originally Added On: July 31st, 2020]
- Government moves from one 'emergency' to the next - The Republic [Last Updated On: July 31st, 2020] [Originally Added On: July 31st, 2020]
- NASA To Use Nuclear Power Can Help Colonize Moon And Mars. Is It Worth It? - Inventiva [Last Updated On: July 31st, 2020] [Originally Added On: July 31st, 2020]
- Elon Musk selling LA homes and dreams of move to 'self-sustaining' Mars colony - Daily Star [Last Updated On: July 31st, 2020] [Originally Added On: July 31st, 2020]
- Nuclear power plants could power colonies on the Moon and Mars - SlashGear [Last Updated On: July 31st, 2020] [Originally Added On: July 31st, 2020]
- To infinity and beyond: Sex dolls in space could be a reality for Mars 2024 mission - IOL [Last Updated On: July 31st, 2020] [Originally Added On: July 31st, 2020]
- A Space Alliance Between the Quads: The United States, Japan, Australia, and India - International Policy Digest [Last Updated On: August 2nd, 2020] [Originally Added On: August 2nd, 2020]
- Suncream made of skin pigment will help shield astronauts from lethal x-ray radiation, scientists suggest - The Independent [Last Updated On: August 4th, 2020] [Originally Added On: August 4th, 2020]
- How to Feed a Mars Colony of 1 Million People | Space [Last Updated On: August 7th, 2020] [Originally Added On: August 7th, 2020]
- Mars Colony: Frontier on Steam [Last Updated On: August 7th, 2020] [Originally Added On: August 7th, 2020]
- At Night, the Martian Sky Pulses and Glows When Viewed in Ultraviolet Light - Gizmodo [Last Updated On: August 7th, 2020] [Originally Added On: August 7th, 2020]
- From emperor penguins to 96-year-old graduates, here's the good news this week - iNews [Last Updated On: August 8th, 2020] [Originally Added On: August 8th, 2020]
- At Night, the Martian Sky Pulses and Glows When Viewed in Ultraviolet Light - Gizmodo UK [Last Updated On: August 8th, 2020] [Originally Added On: August 8th, 2020]
- UAE Hopes to Inspire Next Generation with Arab World's First Mission to Mars - The Washington Diplomat [Last Updated On: August 8th, 2020] [Originally Added On: August 8th, 2020]
- Life on Mars: Lava tubes could be key to Mars colony - 'Extraordinary for settlement' - Daily Express [Last Updated On: August 8th, 2020] [Originally Added On: August 8th, 2020]
- At Night, the Martian Sky Pulses and Glows When Viewed in Ultraviolet Light - Gizmodo Australia [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- Lovecraft Country and HP Lovecraft's racism: how the HBO series and the novel it's based on reappropriate the author's work. - Slate [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- Creating your own video games isnt impossible this training can get you on the path - Boing Boing [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- 9 Ways To Spend A Beautiful Fall Weekend In Flagstaff - TravelAwaits [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- Learn How To Build Your Own Strategy Based Video Game With These Online Classes - ExtremeTech [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- Life on Mars: Scientists identify the 'extraordinary' key to colonising Mars - Daily Express [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- All the Reasons Why Humans Shouldn't Colonize Mars ... [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- Five steps to colonising Mars - BBC Future [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- Goodbye Mars One, The Fake Mission To Mars That Fooled The ... [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- How Do We Colonize Mars? - Universe Today [Last Updated On: August 10th, 2020] [Originally Added On: August 10th, 2020]
- VIDEO: Stray Cats Spotted at EPCOT - Inside the Magic [Last Updated On: September 8th, 2020] [Originally Added On: September 8th, 2020]
- Expanse: The Real-Life Inspirations Behind The Belters - Screen Rant [Last Updated On: September 8th, 2020] [Originally Added On: September 8th, 2020]
- Per Aspera is Massive and Its Depiction of Mars is Fantastic - COGconnected [Last Updated On: September 8th, 2020] [Originally Added On: September 8th, 2020]
- Elon Musk and SpaceX's Mars mission may be difficult - Somag News [Last Updated On: September 8th, 2020] [Originally Added On: September 8th, 2020]
- Forget Mars, humans should head to Venus and live in the clouds - scientist - Daily Express [Last Updated On: September 8th, 2020] [Originally Added On: September 8th, 2020]
- #SpaceWatchGL Column: The hell of humans in heaven - Debating the risks of space technology and habitation - SpaceWatch.Global [Last Updated On: October 30th, 2020] [Originally Added On: October 30th, 2020]
- Mohammed bin Rashid announces second satellite to be built by an all-Emirati team - WAM EN [Last Updated On: October 30th, 2020] [Originally Added On: October 30th, 2020]
- There's water on the moon's sunlit surface. Colonization could be on the horizon. - News@Northeastern [Last Updated On: October 30th, 2020] [Originally Added On: October 30th, 2020]
- The five biggest effects Trump has had on the US space program - MIT Technology Review [Last Updated On: October 30th, 2020] [Originally Added On: October 30th, 2020]
- Elon Musks SpaceX will make its own laws on Mars - The Independent [Last Updated On: October 30th, 2020] [Originally Added On: October 30th, 2020]
- Civilization 6: How to Win as Babylon (Tips, Tricks, & Strategies) - Screen Rant [Last Updated On: December 24th, 2020] [Originally Added On: December 24th, 2020]
- The Midnight Sky ending explained - what happened to Earth? - digitalspy.com [Last Updated On: December 24th, 2020] [Originally Added On: December 24th, 2020]
- Balkan mystic predicts world will see 'cataclysms and disasters' - Metro.co.uk [Last Updated On: December 24th, 2020] [Originally Added On: December 24th, 2020]
- For NASA, It Should Be Mars or Bust - The Wall Street Journal [Last Updated On: December 24th, 2020] [Originally Added On: December 24th, 2020]
- How AI Will Help the U.S. to Mars and Beyond - Nextgov [Last Updated On: December 24th, 2020] [Originally Added On: December 24th, 2020]
- Chimpanzees are important and accomplished tracing the path to space - Amico Hoops [Last Updated On: February 1st, 2021] [Originally Added On: February 1st, 2021]
- Team Behind Space Probe Headed To Mars Includes Staff From CU Boulder - Yahoo News [Last Updated On: February 1st, 2021] [Originally Added On: February 1st, 2021]
- How Elon Musk And A Mission To Mars Might Boost Internet Speeds In Rural Kansas - KCUR [Last Updated On: February 1st, 2021] [Originally Added On: February 1st, 2021]
- Advice From Tesla's Elon Musk: Forget The Money, Ignore Critics, Think Big - InsideEVs [Last Updated On: February 1st, 2021] [Originally Added On: February 1st, 2021]
- Newly Invented Fusion Rocket Thruster Concept Might be Our Ticket to Mars and Beyond! - Tech Times [Last Updated On: February 4th, 2021] [Originally Added On: February 4th, 2021]
- NASA and CSA Will Give $500,000 To The Best Idea of Food Production In Space - Science Times [Last Updated On: February 4th, 2021] [Originally Added On: February 4th, 2021]
- Jeff Bezos Renews Focus on Blue Origin, Which Has Been Slower to Launch - The New York Times [Last Updated On: February 4th, 2021] [Originally Added On: February 4th, 2021]
- Opinion | Why Biden must pursue space diplomacy with Russia and China - Politico [Last Updated On: February 4th, 2021] [Originally Added On: February 4th, 2021]
- "The Expanse" shows the dangers of treating extremism as a joke - Salon [Last Updated On: February 4th, 2021] [Originally Added On: February 4th, 2021]
- End of the world: Elon Musk warns of 'civilisation collapse' if we don't leave Earth soon - Daily Express [Last Updated On: February 4th, 2021] [Originally Added On: February 4th, 2021]
- Elon Musk opens up about Mars, Gamestop and Dogecoin | Heres everything he said - Republic World [Last Updated On: February 4th, 2021] [Originally Added On: February 4th, 2021]
- Crayolas sprawling new exhibit launches at Franklin Institute with creativity on the brain (PHOTOS) - lehighvalleylive.com [Last Updated On: February 20th, 2021] [Originally Added On: February 20th, 2021]