Startup Sector Breakdown: Aerospace 2020

In 2016, billionaire investor Mark Cuban led the seed round for Relativity Space – the startup behind the world’s first completely 3D printed rocket.

With their first launch expected to come next year, their ultimate plan is to take a rocket to Mars.

So, it turns out that building rockets is expensive.

Earlier this month, Relativity began raising $500 million in a Series D round at a whopping $2.3 billion valuation.

That’s crazy considering they’ve yet to successfully take a rocket to space.

Cuban must see something with them though… he jumped in on this round as well (along with Y Combinator, Fidelity, Jared Leto, and others).

While companies like Relativity Space, Virgin Galactic, and SpaceX are in the pursuit to make space exploration mainstream…

The broader Aerospace sector is ripe with innovation – that’s the focus of my latest edition of Angel Insights.

 

Today’s Trends In Aerospace 

 

Big names like SpaceX and Virgin Galactic are no stranger to headlines. These are some of the biggest names in Aerospace technology today. 

But there is much more to watch out for in this space. “The final frontier” has never been closer. Innovation and investment are making things like space tourism and moon bases realistic goals.

Smaller companies benefit from lucrative government and military contracts. And a recent boom of acquisitions also gives them a short path to exit as the industry consolidates.

Let’s take a look at some of the trends in the aerospace industry and cover the biggest stories and startups that you need to know to spot investment opportunities.

 

Biggest Trends in the Aerospace Industry

 

Today, things move fast in aerospace. Entrepreneurs have been focusing on a few big things in particular to find success. 

Here is what to look out for:

  • Low-risk digital innovation – Low-risk, high-impact technologies like AI, sensory technologies, and robotics get the most focus for innovation. 
  • Electric aircraft – Global sustainability issues, government regulation, and the high costs of fuel make partially-electric and fully-electric aircraft more in-demand each year.
  • 3D printing – Production is one of the priciest parts of aerospace development. With 3D printing, companies can go from R&D to iteration rapidly and without high costs.
  • Simulations – Simulations lower costs by testing and planning out limitations, maintenance, and repairs in virtual environments. Also, simulations are used as a training tool for aerospace personnel in the military.

These are just a few of the big trends in aerospace, but there is so much more going on. Let’s look at some of the biggest news in the space and see what startups are doing to get ahead.

 

Mark Cuban Doubles Down on Relativity Space Investment

 

Relativity Space creates the world’s first entirely 3D printed rockets. 

The Terran 1 rocket is a new take on how rockets are designed and manufactured, resulting in a lightning-fast turnaround. Modern and streamlined, these rockets have 100 times fewer parts than a normal one and take just 60 days to print.

The long-term goal is to use this technology to develop interplanetary life, improving life here on Earth and getting us to Mars.

Years after leading the startup’s seed round, Mark Cuban doubled down and joined Relativity’s Series D round of funding at a $2.3 billion valuation.

This round saw a half of a billion given by Cuban, Y Combinator, Fidelity, and Tiger Global, among others.

 

SpaceX Just Changed Space Projects Forever

 

In what is by far the biggest aerospace news today, SpaceX’s privately funded and designed capsule, Resilience, just successfully brought four astronauts to the international space station. 

This was the first of six commercial launches that NASA has purchased from SpaceX. 

The success of this mission marks the end of an era of huge and clunky government-run projects fueled by politics and ushered in the age of commercially-viable projects run by private companies.

For investors and entrepreneurs in the space, this is incredible.

SpaceX has steadily crunched down costs over the past few years to create a capsule that puts previous efforts to shame.

With NASA’s former Space Shuttle program, it cost $55,000 to put a single kilogram into orbit. 

To do the same with SpaceX’s Falcon 9, it costs just $2,700. That’s 95% cheaper.

SpaceX’s founder, CEO, and CTO Elon Musk promises that his next spacecraft, Starship, will bring that price down to $200.

With NASA’s openness to private companies throughout the new Commercial Crew Program and with the rapidly decreasing price of launches, “the sky is the limit” just doesn’t do justice to the huge potential here.

 

Zephyr Brings Customer-Centric Designs to Economy Air Travel

 

Zephyr is trying to change the experience of “economy class.” 

By retrofitting existing Boeing and Airbus commercial aircraft, Zephyr can create a more luxurious economy experience that increases revenue for airlines.

The new cabin features lie-flat seats to allow comfortable sleeping without having to pay more for business class. These seats are social distancing compliant and allow for more privacy than normal economy seating.

 

OneWeb Gets $1 Billion Rescue Deal to Compete With SpaceX

 

OneWeb is building a global communications network that will orbit Earth providing high-speed internet across the globe.

The startup was set back when its biggest investor, SoftBank, suddenly pulled out funding. After restructuring, the company earned $1 billion in equity investment from the UK Government and Bharti Enterprises. 

This puts OneWeb back on track to compete with SpaceX’s Starlink in the race for global satellite internet coverage. 

Now the company is set to resume its satellite launches in December 2020, bring its connectivity services to the UK and the Arctic in late 2021, and expand globally in 2022.

 

European Space Agency-Backed Startup Plans to Harvest Water On the Moon

 

Ispace Technologies is a Japanese company that develops a lander for making deliveries to the moon. More broadly speaking, Ispace develops solutions for space mining.

Despite its foreign origin, Ispace has decided to plant its roots in Colorado and establish a headquarters there. 

Colorado has grown into a global aerospace capital. It earns the largest number of NASA and U.S. Government contracts other than Washington D.C.

Ispace relocated to Colorado to leverage the highly skilled workforce and the multitude of aerospace programs.

Along with the move, Ispace was given a Tax Credit from the Colorado Economic Development Commission worth $1.13 million. Along the way, the team picked up SpaceX veteran Kursten O’Neill who will come on to lead engineering. 

If the idea of moon mining seems a bit far fetched to you, keep in mind that in just three years, Ispace has earned around $125 million in funding. 

On top of that, Ispace was chosen by the European Space Agency to be a part of PROSPECT, a program for extracting frozen water on the moon.

Listen, if you want to learn how to get in on the action in the private market, then you must watch this video here. You’ll discover one of our most attractive investment ideas in 2020 and why we dropped more than 6 figures into the company.


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