As space exploration continues growing in bounds, there’s need for steady capital and technical support for companies entering the sector. NewSpace Capital provides financial and technical assistance to emerging space-tech firms around the globe. Interview.
Can you present your company in a few words?
NewSpace Capital is a space-focused private equity firm that invests in growth stage deep- tech companies. As space sector reaches new heights, NewSpace Capital focuses on the critical technologies that enable its growth and applications that make it useful to the customers on Earth. The firm leverages over 150 years of investment, commercial, and technical experience across €15+ billion in space and technology-related deals.
Which trends are impacting the PE industry?
The geopolitical situation has tipped the business cycle over the summit it was pushed to since 2008 by fiscal and monetarist stimulus. The challenging economic environment currently and ahead increases focus on efficiency in the traditional industries—from energy to agriculture, which in its turn raises demand for the continued digital transformation, process optimization, and structural change. Increased competition in all global markets means shrinking room for maneuver – it is increasingly difficult to unlock extra value by simply scaling the operations, the value should come from higher productivity. This means that PE firms that are industry-focused, have deep expertise that helps them to unlock the potential have an advantage versus generalists. We also see that the need for structural change and further digital transformation drives demand for the space-enabled products and services. In the times of the general downturn, it feels good to be in a growing industry.
What risks and opportunities do you identify?
There are generally leaner times ahead – high commodity prices, uncertainty of supply and real risk of famine in many parts of the world brings people’s focus back to basics. This is bad news for VC — which can be seen by the fundraising and exits in the first quarter – and for public markets, but good news for PE, if not for the entire industry at large, then certainly for a selected group of firms with counter-cyclical strategies. We see strong performance within our portfolio and overall, in the space market. The geopolitical environment provides strong tailwinds and demand for the space-enabled digital transformation plays to it as well. Therefore, we have positive outlook for our part of the market.