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UK leads Europe in race for space investment, new report finds

A PwC-UK Space Agency report reveals the UK is the most attractive destination for private investment in space after the US.

by gary cartwright
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New analysis from investment experts offers insight on the wealth of opportunities found within the UK’s £17.5 billion space sector.

The ‘Expanding frontiers – The down to earth guide to investing in space’ report, produced by PwC in association with the UK Space Agency, highlights expected global space sector growth of up to 11% per year over the next decade and a near doubling of venture capital investments in revenue-generating space companies in the UK between 2015 and 2022, with 63% of investors new to the sector in 2021.

The report details trends for new and established investors who are interested in growing their space portfolio, including opportunities with companies seeking to improve access to healthcare and tackle global climate change challenges, from decarbonising economies to increasing food security.

Craig Brown, Director of Investment at the UK Space Agency, said:

This report shines a light on the breadth and depth of space investment opportunities. From today’s satellite communications to the future of orbital assembly, space has taken on an increased significance as a deeply embedded part of the global economy that is poised to grow at up to 11% per annum to 2030.

As the number of satellites above us increases dramatically, there are even greater opportunities to capitalise on the wealth of data they collect and on the international efforts spearheaded by the UK to keep the space environment safe and sustainable for generations to come.

According to the report, the UK has been the leading destination for space investment in Europe – and second internationally behind the US – since 2015, receiving 17% of global investment.

The Expanding frontiers report calculates a median 400% increase in deal size for early-stage investments and highlights a number of fast-growing UK space organisations, from satellite communications firm, OneWeb, to Wales-based aerospace manufacturer, Space Forge, which raised Europe’s largest ever seed round for a space tech company in December 2021.

Research shows that the UK has become a particularly attractive market for venture capital firms, being home to the HQ of leading space fund Seraphim Capital – which was the top investor in UK space organisations in 2022 – and offices of US space and deep tech fund, TypeOne VC.

UK space organisations have received investments from at least seven of the most active global investors, and nine of the largest UK-based venture capital firms, including University of Cambridge Enterprise, Octopus Ventures and Molten.

Taking into account government, non-commercial (universities and research institutes) and commercial organisations, it describes the UK space sector as a “hidden utility” that underpins our daily lives and supports an estimated £370 billion of the country’s economy, mostly through satellite-based services.

The data follows figures in the recent Size and Health of the UK Space Sector Report showing that £635 million was invested in UK-headquartered space companies through 34 identified deals last year, with acquisitions accounting for three quarters of the total investment value.

Space sector income increased by more than 5% into 2021, outpacing both the growth of the global space industry in the same period (1.6%) and the general UK economy, which contracted by 7.6%.

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