Many analysts forecast that by 2040, the global Space Tech Market will generate revenues of over US$ 1 trillion. [1] It is estimated that this growth will be driven, for a percentage ranging between 50% (prudential scenario) and 70% (optimistic scenario) by satellite broadband connection, due to the expected boom of data demand.
Thanks to innovations, both in launching and manufacturing technologies, the cost of access to space is declining exponentially, opening enormous opportunities for small and medium commercial companies to enter the market.
Considering investment side, the global space is accelerating in attracting strong investment from leading venture capital firms. Annual equity investment in early- and growth-stage space opportunities grew dramatically from less than $100 million in 2010, to over $5bn by 2020 [2]
The space investment sector is booming: from autonomous vehicles, to location-based services, to critical communications to Earth and near space observation, the world depends on satellites.
Three factors are driving this space investment booming [3]:
- The Internet of Things (IoT), which allows space operators to put sensors on everything everywhere, be it the Earth, ocean, space and the universe, providing a critical role in collecting and then analysing data to gain crucial insights on our planet and space;
- The miniaturization of components, which exponentially drives down the cost of accessing space. This has propelled more people to build their own rockets, CubeSats and nanosats, and emerging countries to play a role in space and allowing investors a healthy ROI;
- And finally, the exposure and awareness to New Space brought by the billionaire initiatives
Albeit the dominant idea in new space is vertical integration, an increasing number of companies propose the externalisation of non-core business tasks. A typical example is the amount of start-ups proposing GSaaS (Ground Segment as a services) with virtual networks of ground stations.
There is also a great potential for a new generation of suppliers providing components and subsystems for space missions: platforms, sensors, electric propulsion engines, transceivers, laser communication terminals, etc. It can include start-ups develop innovative solutions or legacy suppliers adapting their own company model to low cost and mass production.
Considering communication, as of 2021, UN underlined that more than 3 Billion people lack internet access and more than half of our planet is still unserved even by a low-quality connection. On the other hand, innovation in fields like autonomous cars, IoT, AI and VR cannot disregard the necessity to improve SatCom download/upload capacity.
The small satellites were previously only used for scientific missions, Earth observation (EO) and remote sensing, but are now used to support telecommunication services (e.g. SpaceX Starlink).
Small satellites organized in constellations can be used to provide data distribution (broadcast applications), for data exchange (Internet of Things and Machine-to-Machine paradigm), for Smart Cities, precision agriculture and also to extend Internet access globally.
The smallsat market is growing dramatically, driven by dozens of constellation operators [4]. Those new applications led to the forecast of around 20k smallsats or even more until 2030[5], mostly devoted to broadband satellite communication.
Global Small Satellites Market in 2019 was valued at US$ 88 Billion and is projected to reach a market value of US$ 360 Billion by 2030 [6]. The market is estimated to grow at a CAGR of 13,5% between 2020 and 2025, while from 2026 onward the expected CAGR is 14%.
Since 2011 the number of smallsats launched have risen by a factor of 29, and even Covid couldn’t stop this growth; as a matter of fact, in 2020 launches nearly quadrupled YoY. In the first half of 2021 more than 1300 satellites were deployed on orbit, surpassing 2020 record in half the time.
As of 2021, there are more than 5000 smallsats fully operating on orbit around Earth with an average of 400 of them launched per year in the last decade.
Many analysts expect a significative change of gear, with the number of smallsats to be launched in 2032 forecasted at 1700 on average.
Although satellite networks cover almost everywhere around the world, high cost of receiver hardware, low speed, and high latency have been a barrier for satellite broadband services to gain mass adoption.
Recent Low-Earth Orbit (LEO) satellite development by SpaceX, OneWeb, and Amazon’s Project Kuiper are expected to change market dynamics since shorter distance from Earth’s surface enables LEO satellites to support latency as low as 30 milliseconds.
The capital inflow in the Space Tech sector determined a significant boost in terms of miniaturization of the satellite manufacturing technology, pushing Small Satellites market. These satellites weighs less than 500kg, but the majority of them is in the 10-100kg range.
The innovation in satellite manufacturing also determined a production costs collapse, giving the opportunity to a vast number of commercial companies to deploy low-cost constellation, especially on Low Earth Orbit (LEO) for broadband internet, Earth Observation, Autonomous driving and other Internet of Things features.
The boom of the CubeSats and smallsats fostered the emergence of new companies in the space supply chain and the evolution of the legacy ones. They provide subsystems, equipment and components.
The development of Ka-band antennas, transmitters and transceivers is expected to determine a significant cost-reduction for both satellite operators and end users. In fact, while the cost for 1 Gigabit on Ku-band bandwidth is around 1.2 million $, the same amount of data can be obtained through Ka-band at a cost of less than 300k$. This advantage could represent a gamechanger, especially for the development of global broadband internet.
In this market segment Picosats is developing a radio system and antenna operating in high frequency bands: Most of the satellites are operating on X-band and C-band, therefore these segments are heavily congested and require bigger investments to enter the market. On the other hand, Ka-band is a green field, it’s cost-efficient and offers higher potential data transferring power.