Space Angles, a financial services company focused on space-sector investment, produced figures showing that launch-service companies continued to take in the majority of new sector investment for the first six months of 2018. But satellites accounted for 68% of the total transactions. Seraphim Capital, which also tracks global space investment but with a different emphasis, produced figures showing the launch sector as a large but less-dominant object of venture-capital interest in the past year. Credit: Space Angels

FARNBOROUGH, England — Two investment companies separately tracking space-sector financing found the launch-services sector is still a major object of investor interest, with data analytics and drone development and operations a growing part of the picture.

Space Angels and Seraphim Capital both invest for their own accounts but track global space-industry investment trends. Because of their different focus, their figures do not always line up with each other.

There are the inevitable problems of definition. Does SpaceX’s Series I round, totaling $214 million so far, count as a “venture” investment? Should a Big Data analytics company that uses a broad mix of social media, government and industry statistics — but also uses satellite data — be considered a space-sector participant?

That being the case, the two indexes are best used over time to determine investor direction.

They both agree that launch services continues to draw heavy equity investment.

Seraphim excludes founder investments, such as Amazon/Blue Origin owner Jeff Bezos’s $1.1-billion sale of Amazon stock in late 2017 for launch-service startup Blue Origin. But it includes the SpaceX Series H.

Funding activity still strong in the space sector in 2018…. Credit: Seraphim Capital

Space Angels’s data concludes that more than 60% of non-government equity investment in the space sector for the first six months of 2018 “has gone into launch companies.”

For Seraphim, the launch sector pulled in about 40% of the total venture investment for the first half of 2018.

One of the larger launch-vehicle investments in recent months was in Reaction Engines of Britain, which is designing a hypersonic air-breathing engine with both British pubic investment and financial support from BAE Systems. The most recent, $37.3-million financing round included Boeing HorizonX Ventures, Boeing’s technology-investment fund.

… with data analytics and drone operations taking a good share of the spend. Credit: Seraphim Capital

By either measure, many investors in Asia, Europe and the Americas are now betting that new rockets will find market traction and profitability despite the fact that dozens of new vehicles are being designed for the smallsat market.

With the notable exceptions of SpaceX and Blue Origin, whose backers are investing in large rockets for satellites, astronauts and orbital infrastructure, the dynamism in the launch sector is in the smallsat sector.

Venture-investment activity in satellite hardware builders has been relatively slow so far in 2018. Many of the recent satellite-manufacturing startups have been companies that have their own services businesses and are building their hardware in-house.

Oxford Space Systems of Britain, which is designing deployable satellite antennas, closed its largest funding around, totaling $8.9 million, in June. Through five rounds since 2014, the company has raised 11.6 million British pounds, or $15.3 million.

The most recent funding round was led by Wren Capital, Midven, Longwall Venture Partners, IQ Capital Partners LLP and Foresight Williams.

Companies developing specific satellite sensors and securing early-stage investment recently include Orbital Sidekick, which is developing a hyper spectral sensor, one of which was recently launched for the NanoRacks External Payload Platform (NREP) on the International Space Station.

Orbital Sidekick’s recent $4.5 million funding round was backed by Allied Minds and 11.2 Capital.

There is also plenty of activity in drone applications — hardware development and software to render the vehicles as autonomous as possible with Artificial Intelligence and Machine Learning techniques.

Whether to include drone developments in space-sector surveys is an endless debate. From observation/surveillance perspective, it’s just a matter of altitude. For drone-delivery services, it’s more distant from what’s normally viewed as the space industry. But including drones has the appeal of embracing a fast-growing  industry with enormous commercial, civil-government and military potential.

Uavia and Total tested the Uavia Robotics Platform during a simulation of a crisis at a refinery. Credit: Uavia

Seraphim includes multiple drone transactions in its summary of 2018 investments to June 30. “We consider this under the wing of the space industry,” Seraphim said. Seraphim recorded 43 transactions, with a total value of $481 million, relating to drone-hardware manufacturers in the 12 months to June 30, 2018, and 14 transactions, valued at $123 million, for companies selling drone services.

Transactions include:

— $2.3 million for autonomous drone platform provider Uavia, with funding from Airbus Ventures, Sofimac Partners and a French public technology-investment bond fund managed by Bpifrance.

— $5 million for Kittyhawk, a designer of integrated drone applications, from Bonfire Ventures and Boeing HorizonX Ventures.

— $6 million for Matternet, an urban drone-provided delivery service, with backing from Boeing HorizonX Ventures, Swiss Post, Sony Innovation Fund and Levitate Capital. Matternet is providing hospital-to-hospital service in Switzerland and recently concluded an agreement with the U.S. Federal Aviation Administration.

Orbital Sidekick’s HEIST hyperspectral sensor was launched to the Nanoracks external platform on the International Space Station and is expected to start service in 2019, marking Orbital Sidekick’s expansion from aerial to a planned network of small satellites. Credit: Orbital Sidekick

Big Data analytics is another not-so-space sector business that is included in most sector tallies because some of the companies make heavy use of satellite data.

But satellite data is just one of a large and increasing number of data sources. Examples of recent transactions:

— $5 million for QuantCube, a developer of predictive analytics, with backing from Kingdom Holding Co., Moody’s Corp. and Five Capital.

— $15 million for Mapillary, which produces street-level imagery and has received backing from BMW iVentures, Sequoia Capital, Samsung Catalyst Fund and LDV Capital.

— $17 million for Cape Analytics, which uses AI to deliver real property-related data to insurance companies, who are among its backers. The latest round was led by XL Innovate and included Formation 8, Data Collective and Khosla Ventures.

— $17.5 million for Unacast, a location-data platform whose most-recent round was backed by White Star Capital, Telia, OpenOcean and Investinor.