We attended the Space Sector Market Conference hosted by AUVSI and Draper this week. Here are our key takeaways from industry, government and academic leaders on various space market trends and issues.
Strong demand signal from US gov’t; RFP seeking 126 communications satellites. The US DoD looks to the commercial sector to develop and deliver next-generation technologies and space capabilities. The Space Development Agency (SDA) is planning to have 28 Tranche 0 satellites for the National Defense Space Architecture in orbit a year from now, and currently has a Request for Proposal (RFP) seeking 126 base satellites for Tranche 1 Transport Layer. Unlike most of the DoD's satellite constellations, which are generally made up of a small number of large and exquisite satellites in geostationary orbit (GEO), this will be made up of hundreds of small satellites operating in low Earth orbit (LEO). SDA is building a multi-layered system based on an architecture of proliferation and spiral development to provide warfighters with rapid development and fielding of persistent and resilient space capabilities. It is planning to launch new satellites every two years that will deliver data to weapon systems, extend surveillance and support ground systems with critical intelligence.
Emerging tech areas to further open up access to space. The cost reduction in launch and advent of small satellites opened up commercial access to space. Investors looking at other technologies to further open up space might consider enabling, support services such as in-space or ground communications relay, satellite bus manufacturers, enhanced modules (next-gen propulsion), as entrepreneurs could use best of breed tech to build their solutions without starting from scratch.
The future of space is about real time data, according to the Air Force Research Lab. We’re only making good use of about 1% of data collected in space currently as most satellites lack of real time communications to the ground, even though they’re collecting valuable data. The space industry can also address cybersecurity and provide data assurance by building a hardened infrastructure, the right platform to enable development of new applications.
NASA is bullish on in-orbit servicing and manufacturing. While there is a lot of interest from the private sector, NASA believes it has a critical role to play by setting the vision and continue funding innovative startups. Examples of this emerging sector include persistent climate platform in space and manufacturing on the Moon.
Concerns about rapid increase in valuation in Space and influx of new investors. US gov’t demand signal for commercial space is extraordinarily high; this is driving significant capital flow from new investors in space. While investors remain excited about the tremendous long-term opportunity in space, there are concerns about the rapid increase in valuation for companies that may not be sustainable.
Business models and trends to watch in space, 1) Space startups are selling services instead of hardware (satcom connectivity or Earth Observation analytics rather than capacity or pixels), 2) Space startups are becoming vertically integrated to offer end to end solutions, following the SpaceX business model, or they are looking to partner with companies in different parts of the value chain.