“Is your investment in new space smart money? – Due Diligence in Space

August 2021

Billions of dollars in investment are entering the space industry through a variety of means, into companies that are at various points of their start-up journey. The space industry is different to industries being primarily B2B and requiring large amounts of investment before revenue generation, with companies needing large capital investment in R&D for their initial product. There are huge opportunities unfolding within the space industry both within upstream (hardware and processes involved with putting things in space) and downstream (using data derived from space-based assets) markets, however, without knowledge in this sector it’s difficult to ensure that your investment is smart money. CST can provide independent advice to help you navigate this market:

Technology Due Diligence. There are a wide number of startups entering the industry with concepts that aren’t physically possible or would require a huge amount of investment to be feasible. There are natural limits set by physics on how small things can get – this is an issue that particularly affects those aiming to provide ultra high resolution of the Earth using pico or nano satellites. These issues are further compounded with power generation and communications bottlenecks. CST provides comprehensive technology reviews, outlining competition from rival projects or adjacent sectors, as well as the possibilities within a certain technology and in many cases reviewing the feasibility of a technology, this is particularly the case among ‘breakthrough’ technologies. CST has a team of masters and Ph.D. educated engineers and scientists, ready to provide insightful feedback on investment opportunities.

Business Plan – it may be possible but is there a market? A company lives and dies on its business case, while a concept or startup may be viable there may not yet be a value chain in existence and the horizon of profitability is far off. This is a problem for many of the startups focusing on distant concepts such as asteroid mining. These concepts may well be viable in the future, but they can create issues for return on investment. Traditionally, the space market has been slower to provide returns – in many cases, there are technologies that will bring a much faster return on investment. There are also many startups where the cost of development will outstrip the potential market, eliminating the potential for returns. CST has reviewed business cases for many companies in the past, providing insight on the overall space market and particular niches. As an independent entity, CST’s market research can also be performed with neutrality and discretion. CST provides a wide range of due diligence services to ensure that your investment in space is smart money. There is a wave of new and potentially profitable space startups, but there are duds among them, CST is a specialist space consultancy which will help you to navigate the technology possibilities and the market, and is truly independent – not investing within space startups. To schedule an introductory call contact, cst@commercialspace.co.uk