The UK’s climate data from space community has huge potential for investors – but the space sector is the ‘hidden utility’ underpinning our daily lives and economy, says new report
Published May, 2023
The Earth Observation for climate community has been told that it has to start shouting about its own achievements if it wants to attract external investors.
The clear directive was issued in the wake of a joint report by the UK Space Agency and PwC at an event to promote space technology to an audience of venture capitalists, institutional investors, financial advisory and capital markets services, and legal services. ‘Expanding frontiers: the down to earth guide to investing in space’, describes the space industry as having a ‘significant role as the ‘hidden utility’ underpinning our daily lives and economy, supporting an estimated £370bn (18%) of UK GDP every year’.
“Downstream is where the opportunities are,” said Mauro Mortali, Space Lead at BT. “And the downstream market needs to make more noise!” He went on to say that the UK ‘punches so much above its weight’ in the international space industry, second only to the United States, and that now is the time to take ‘that great academic insight’ and commercialise it.
He was speaking during a panel discussion that also featured Space4Climate member Satellite Vu’s CFO, Camilla Taylor; Sanjeev Gordhan, Partner at Type One Ventures and Josh Broom, Head of Space at the Department of Business and Trade.
Attractive potential of Earth Observation and climate services
The mood was positive at PwC Strategy&’s More London offices, on May 24th, yet there was a clear call to action for those representing the UK space sector, with Earth Observation for climate picked out as having one of the most attractive opportunities for investors.
Sanjeev, Partner at Type One Ventures, said he had scoured the US and other areas but chose the UK to set up Type One VC because it was technologically superior, but he added: “Capitalisation needs to be supporting innovation,” later adding: “I am really proud of what our universities are achieving, the spin outs, understanding how they need to turn their innovations into businesses.”
Josh said: “The passion and eagerness within the sector is palpable, the people are all genuinely so excited about the direction of the sector, we have such exciting innovation, technology and developments, university spin outs and it feeds through to the people driving the frontier.”
Camilla highlighted the diversity of use cases in Earth Observation including benefits for the good of society and climate adaptation as well as commercialisation, as Satellite Vu celebrated a £12.7m funding boost.
Realistic timeframe to reach market
Dan Osrin, Senior Manager of PwC’s Strategy& arm, was the event host. He talked investors through impressive statistics around the UK space sector and the potential of Earth Observation in particular, describing it as having the highest number of companies and highest number of deals, plus attracting investment from global corporates such as Microsoft, FM Global, Cargill, Agreena, S&P Global and many others. And it was these and many other positives that PwC and the UK Space Agency were keen to highlight.
But for the many current investors and potential investors in the room, the most pressing requirement was said to be a realistic timeframe to reach market and to produce a return on their investment, with a ’10x’ figure quoted in a break-out group discussion. Proof-of-concept funding, patents and regulation were also mentioned.
In relation to climate change, there was a call for the UK Space Agency to educate the investor community to see that space is part of the solution and also for the UK Government to ‘demonstrate its commitment’ by buying space services as a customer – as opposed to as a funder.
Value of EO case studies
Trustworthy data is considered by investors to be a reliable product, providing evidence for decision-making and generating innovation.
The Earth Observation community was told it needs to present convincing use-cases and to demonstrate that it is developing services that investors can see are providing a solution to a recognisable problem, showing the impact its particular technology has or will have.
David Caillard, of Karroo Capital, shared his views at the end of the event. He said: “Space is the enabler for all these challenges that government, corporations and institutions are trying to solve but they don’t have that much knowledge about it and the space sector can help. People need to understand that that space is transforming so many other sectors.”
Krupa Nanda Kumar, Climate Services Development Manager of Space4Climate, after the event: “This is a very clear message that Space4Climate will be building into our Earth Observation for climate communications on behalf of our members. The ‘Expanding frontiers’ report is packed with inspiring statistics on the UK space industry and we are proud to be playing our part in the thriving EO community.
“We will continue to engage with PwC and the investment sector.”
“Downstream is where the opportunities are and the downstream market needs to make more noise!”
– Mauro Mortali, Space Lead at BT
Read more and download the report