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The current economic turmoil is forcing space tech startups to scale back their lofty ambitions as venture capitalists turn to safer bets, VC firm Space Capital said. . Decades of inflation, soaring interest rates and the war in Ukraine have rocked global financial markets, forcing investors to rethink their investment strategies and focus on companies with viable products in the market.
Investments in space technology companies that collect, process and analyze space-related data fell 80% from about $5 billion in the same period last year to about $1 billion in the third quarter. New York-based Space Capital said:
VC investment in space companies has fallen 44% compared to a 31% decline in the broader market, he added. Chart – Venture capital investment in space companies is declining
Chad Anderson, managing partner at Space Capital, told Reuters that VC firms are “trying to reduce their exposure to capital-intensive companies with low profitability or long-term models. ‘ said. “Thus, the space infrastructure layer will be hit hardest during the recession.”
Many aerospace investors have pulled out over the past year, said William Kowalski, co-founder of Atomos Space. “Funding has been difficult, but capital efficient companies have been able to differentiate,” he said.
The gloomy mood has also hit companies listed on the ‘New Space’ such as Rocket Lab USA, Astra Space, Spire Global and Satellitelogic Inc, whose stock prices have fallen from 49% to 92% of his falls between