If you had to guess based on launches, you’d think 2023 was a stellar year for investment in the space industry. But while the fourth quarter ended strong, just $17.9 billion of capital flowed into the sector last year—a 25% drop from 2022 and a decadal low. 

These numbers come out of Space Capital’s year-end investment report, which was released this week. They suggest the space economy was not immune to trends in venture funding broadly, as high interest rates, bank collapses, and a concerning spate of high-profile mass layoffs prompted a pullback. 

Within the space industry, the reticence to invest manifested primarily in the applications category, which includes businesses specializing in hardware and software that use data from satellites. But the category, which includes companies such as Uber and Metropolis, remained by far the largest, despite seeing relatively little investment in 2023. Instead, investors flocked to infrastructure companies—those that build and operate space assets, such as SpaceX, RocketLabs, and Amazon.

“Given the macroeconomic headwinds of the past two years, you would have expected to see investors shift their focus away from capital-intensive hardware and toward low-capex [software as a service],” says Chad Anderson, Space Capital’s founder and managing partner. “However, we’ve seen the opposite.”

Anderson expects geopolitical tensions will continue to drive the space economy in 2024. And he says the US, claimed the vast majority of investments made in 2023, is poised to keep its lead. Certainly it helps that the US Defense Department, with its rapidly growing budget approaching $1 trillion, is redesigning to utilize commercial space services.

Last year also saw a record number of acquisitions. Uber led the charge with 12 deals, mostly for satellite players. “2023 was a year of consolidation in the Space Economy,” Anderson said. “That said, we expect to see even more in 2024.” 

That means SpaceX, which nabbed $150 billion out of the $211 billion invested across all space infrastructure companies, could finally see some competition this year. But it would take a big development—for example, if Blue Origin buys United Launch Alliance.



The new X-59, which debuted this week, won’t fly in space. But it is still a marvel of engineering. The plane’s partners, NASA and Lockheed Martin, hope the experimental quiet supersonic plane will help pave the way for “a new generation of commercial aircraft that can travel faster than the speed of sound.”

The X-59 plane sits on a runway with mountains in the distance

Photo: Lockheed Martin Skunk Works

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“New phone who dis?” was one of the first text messages sent on the new direct-to-Starlink service. The company is working with T-Mobile to connect cellphones to space.

NASA was finally able to open the container of asteroid dust that was returned to Earth last year. It required designing new tools for the job.

Peregrine is headed back to Earth after a catastrophic fuel leak. The unlucky lunar lander expected to burn up in the atmosphere.

MIT researchers have a new open-source model for space debris. It’s able to model individual objects and orbital characteristics.

The source of the explosion that ended Starship’s second flight has been revealed. It was caused by venting extra propellant.

This week’s Space Business newsletter was authored by science writer and photographer Mara Johnson-Groh, and edited by Heather Landy.

Last week: Payload Problems

This was issue 212 of our newsletter. Hope your week is out of this world! Send financial facts, tips, and informed opinions to talk@qz.com


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