Analysis

Space from SPACs

, Marketwatch

2020 and 2021 brought a new wave of space companies going public, often by way of a SPAC. New products are being launched to capitalize on this growing industry, such as the ARK Space Exploration and Innovation ETF ARKX, -0.57%, which came to market in late March.

Right now, close to 3,000 active satellites are orbiting above Earth. This number is expected to skyrocket in the coming years. By 2025, experts predict a 230% increase in satellite launches per year, with 24,000 launches currently in planning — and that figure doesn’t even include launches by Tesla TSLA CEO Elon Musk’s SpaceX, OneWeb or Kuiper. SpaceX’s Starlink, for example, has applied to fly 40,000 satellites. 

Given this scenario, investors are taking heed of myriad investment opportunities. SPACs are viewed favorably as a way for space companies to access the public markets. Several space companies have gone the SPAC route, including satellite imagery specialist BlackSky SFTW, -0.69% and U.S.-New Zealand aerospace manufacturer Rocket Lab USA VACQ, -2.34%. While considerable tenacity, expertise, ingenuity and upfront capital are still required to launch viable space-based businesses, today’s entrepreneurs are meeting the challenges of building a robust commercial space industry, driven by similar visions of wide-open opportunity as those that animated the first space pioneers. If the global industrial market reaches the limit sooner than later, the infinity of space suggests the space economy will keep growing.

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