Space Tech: Why More Tech Firms are Heading into the Final Frontier

Space technology is driving a movement that promises to transform life on Earth and beyond. Tech companies, both large and small, are poised to play major roles in a wide range of space tech fields.

The space industry requires a wide range of innovative technologies, says Helen Weedon, managing director of the Satcoms Innovation Group, a satellite industry association, in an email interview. “Tech firms entering this sector need to be dynamic and flexible, able to adapt as needs change,” she explains. “They also need to listen to as many companies and experts as possible to truly understand the market and customer needs.”

The space sector is rapidly evolving. “We’re seeing the launch of smaller satellites in lower orbits that require a totally different approach than traditional satellites,” Weedon says. “At the same time, space is important for many different applications, from gathering Earth observation imaging to enabling connectivity, and powering next-generation services”

Business Opportunities

Tech firms looking to enter the space market can tap into a wide array of business opportunities. They can focus on developing low-cost launch solutions and satellite platforms, which are in high demand for various applications, such as precision agriculture, disaster management, and global connectivity, says Elizebeth Varghese, partner and principal of Deloitte’s People in Space Team, via email. The massive data generated by satellites and sensors offers another lucrative avenue for tech companies specializing in data processing and analysis, which is valuable for industries such as energy, finance, and insurance.

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The opportunities for tech firms are almost as endless as space itself. “Exploring novel uses of in-space resources using robotics, 3D printing, and AI can lead to the creation of building materials, fuel, and infrastructures in orbit,” Varghese says. “Tech firms can also provide support for [planned] microgravity-based settlements through technologies for life support systems, closed-loop agriculture, and radiation shielding, thus creating new markets in construction, logistics, and space tourism.”

Even cybersecurity providers have a role to play in the space market, as they tailor their solutions to protect against satellite hacking while ensuring the safety and integrity of critical data, Varghese says. “The space market presents a promising frontier for tech companies with the right expertise and innovative solutions.”

Market Direction

The best way for a tech firm to enter the space market is by leveraging its existing expertise and resources to serve the space industry’s emerging needs, Varghese says. “Identifying synergies between current business capabilities and the space industry’s requirements can help create a foothold,” she explains. Establishing partnerships with seasoned space companies, government agencies, or other tech firms is crucial to bridging expertise and resources gaps, Varghese adds. “As space is heavily regulated, tech firms should ensure that their business model and technologies comply with relevant policies.”

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Deloitte’s March 2023 report, Riding the Exponential Growth in Space, highlights a shift in the space market landscape due to declining costs and advancing technology. The report noted a surge in rocket launches, with 186 successful missions in 2022, an increase of 41 from the previous year. “These more affordable launches, and an influx of investment capital, are reshaping the space ecosystem,” Varghese says. “As a result, we’re seeing a surge of new entrants in the market, particularly space startups and the venture capital firms that support them.”

Yet space-focused enterprises looking for investors may find themselves disappointed, warns Kelli Kedis Ogborn, the Space Foundation’s vice president for space commerce and entrepreneurship, in an email interview. “Beyond government funding priorities, the capital environment is a bit challenging at the moment” she notes. “Company valuations are lower, the volume of fundraising is lower, and the time it takes to raise capital is longer.”

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Ogborn believes there’s a growing urgency on the investment side to fund business cases that will pan out quickly. “It’s not just about cool new technology anymore -- you have to demonstrate that there’s a customer base, have the ability to scale, a profitable path, and find a way to gain quick wins,” she advises. “Currently, there’s more interest in companies with demonstrated capabilities, and those with a mature and identifiable product market fit, [in areas] such as satellites, space hardware, and infrastructure.”

Final Thoughts

Looking to the future, Varghese predicts that virtually every tech company will someday be a space company. “The growing space economy with its roots in national defense and satellite communication offers a plethora of opportunities,” she says. “Top global businesses are already harnessing the power of space innovations, which will have a significant bearing on the space economy and influence the broader tech economy.”

It’s an exciting time to be a part of the space industry, Weedon says. “Innovation will be the key,” she notes. “Yet innovation by itself won’t be enough, [and] finding the right way to reach your audience will be crucial to success.”