Anton Alikov, CEO and Founder, Arctic Ventures.
In recent years, outer space has ceased to be the domain of government space agencies and become a fast-growing investment and technology theme, with many private players now operating in the sector. As founder of a firm that invests in space technologies, I’ve noticed advances in spacecraft production and launch technologies, along with the growing human presence in space, have made outer space a new frontier for economic activity.
For a venture investor, space companies are no longer exotic, but an established asset class with relatively clear drivers, risks and cycles.
Market Opportunities
What is the size and growth of the space economy? The numbers are impressive.
According to the Space Foundation, the global space economy reached $613 billion in 2024, growing 7.8% year over year, with the private sector already controlling up to 78% of the market. McKinsey estimates that the global space economy will be worth $1.8 trillion by 2035.
According to Seraphim Space, investments in the sector surged to record levels in 2025, with private investment growing 48% to $12.4 billion.
New players are emerging; many companies have already gone public, and specialized ETFs have appeared. These are all signs that the space sector is maturing.
Structure Of The Space Economy
Conventionally, this industry can be divided into three macrolevels. This structure resembles that of many other industries, such as oil production and refining, and covers the entire value chain.
Infrastructure (upstream) includes manufacturing and assembling rockets, engines, satellites and space stations, as well as launching space assets into orbit.
Space operations (midstream) include managing space and ground systems, as well as orbital logistics. This level also includes the initial processing and distribution of space data.
Applications and data (downstream) cover satellite communications, navigation, Earth observation (EO), data analysis and consumer services, such as internet access, mobile communications and mapping.
Currently, a significant amount of revenue in the sector is generated not by launches themselves, but by the applications and services layer—satellite communications, broadband subscriptions, GPS navigation and more.
I’ve found the entry barrier to the first two segments remains high and mostly available for established companies—while the downstream segment is already more accessible, with many private companies active in it. The European Space Agency (ESA) estimates that more than 90% of the downstream market is commercial.
But what drives the space business these days?
Key Investment Drivers
1. Falling Launch Costs
In recent years, the cost of launching 1 kilogram of cargo into orbit has fallen significantly due to reusable rockets and new technologies. This achievement has significantly lowered the cost base for many downstream business models, allowing startups to launch their own satellites.
As a result, the total addressable market for downstream segments such as data, communications and analytics can grow faster than classical rocket engineering, because launch costs are lower and the number of potential applications has increased.
2. Satellite Constellations And Space Internet
The large-scale deployment of satellites creates steady demand for launch services, production and ground infrastructure. The collection, transmission and processing of space data is booming. The idea of simply buying any satellite operator is already less compelling, but second-tier suppliers—manufacturers of components such as antennas, electronics and sensors, as well as ground equipment and software providers—may be worth keeping an eye on.
3. Earth Observation And Analytics
Companies in the EO segment, including optical, radar and hyperspectral sensor providers, are building a large market serving agribusiness, insurance, logistics, land use and infrastructure. I think the compelling business models are not just “data-only” operators, but companies that control both the space segment and the analytics/integration stack, where sustainable revenue is generated
Public Versus Private Markets
An investor may access the industry via public or private markets. In the public market, the space economy is already represented by several clusters. These include manufacturers of traditional and next-generation rockets, satellite platforms, component suppliers, space telecom operators and companies whose space exposure is part of a broader SaaS or infrastructure business.
Historically, investors have taken much of the risk in the rocket and satellite launch segments; these areas are cyclical, dependent on government contracts and capital-intensive. Exposure through diversified aerospace conglomerates may be less risky. Space-themed ETFs may also help reduce idiosyncratic risk in individual names. These options are already available to a broad range of investors.
Private-company investing, however, remains mostly available to qualified investors with large equity checks.
When approaching the space business, I’ve learned it makes sense to look broadly at companies that use space assets in one way or another, but to focus on bottlenecks: rare components, sophisticated software, integrated services and analytics based on unique data.
Space is a highly demanding operating environment, so investors should remember that the risk profile of this sector is still high: long development cycles, dependence on government regulation and contracts, capital-intensive infrastructure and the threat of technological obsolescence, as the industry is evolving rapidly.
Conclusion
Space is already much more than just rockets and satellites. In my opinion, much of the future value in this industry is hidden in data, software and services. As I have already mentioned, the modern space economy has ceased to be a niche topic and is increasingly becoming a new foundational layer of global infrastructure.
As I see it, the growth drivers discussed above look structural rather than cyclical. The focus is shifting toward selecting leaders and bottlenecks across the entire value chain.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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