As we present the first Seraphim Space Index of 2023 for the period to 31st March, it’s intriguing to see what the New Year brings following a tumultuous and challenging 2022, which saw private investment flows in the global space domain fall 30% to $6.9bn.
The first quarter in 2023 saw a bounce from lows in Q4 22, with private investment increasing by over 60% to $1.4bn. Key trends to draw include the relative strength of European investment activity, with transactions up by nearly 50% in the year to 31st March 2023, a record-breaking 42 transactions in the quarter, whilst European investment of $567m in Q1 was over half the total European investment for the whole of 2022.
Indeed, Q1 marked the first-ever occasion that European investment ($565m) was higher than the US, which invested $456m respectively in the quarter. Q1 also saw a strong pick up in growth staged investment activity with a record number of B, C, and D+ rounds financed. Growth staged investment in Q1 recorded $971m, rebounding against the lows of Q3 & Q4 2022. Evidence suggests that growth companies have come back to the market in Q1 after avoiding the uncertainty of late 2022. However, they are raising smaller rounds, with the average round size for growth deals at $38m.
Early-stage transactions were also strong, closing 96 investment rounds and marginally beating the record transaction numbers achieved in Q4. Albeit in value terms Q1’s $386m was shy of the $400m achieved in each of the previous three quarters.
There was an absence of any mega deals during the quarter, with European launch company ISAR representing the largest round financed at $158m. European companies accounted for half the top 10 financings for the quarter. Overall, a solid start to the year for private investment in the global space domain.
Mark Boggett, Chief Executive Officer of Seraphim Space, said: “Q1 2023 represented a solid quarter, showing growth on all measures from the lows recorded in 2022. We are especially encouraged by the record-breaking activity in the European private investment market. Looking ahead, with a recovery in US investment levels and with the potential of upcoming mega space deals, we could see the total investment levels exceeding 2022. Given the positive tailwinds within both the defence and climate-related markets, the space domain has the potential to continue on the trajectory set in this first quarter.”