How the SpaceX economy can make you money

July 25, 2016 – 04:52 pm

Dramatic rocket launches capture our attention, but opportunities to invest in the commercial space industry (also known as NewSpace) should not be overlooked.

In contrast to the traditional model of large government-run programs, NewSpace is a global industry of private companies and entrepreneurs who primarily target commercial customers, are backed by risk capital seeking a return and profit from innovative products or services developed in or for space. As a result, from large publicly traded companies to nimble start-ups, there have never been more (or better) opportunities to invest in the future of space.

Source: NASA

From 2011 to today, we have watched a universe of 100 companies targeting commercial space opportunities increase to 700 companies worldwide. Roughly 70 percent of these companies are privately held, limiting the opportunities for investors. But the other 30 percent are publicly traded companies.

A $250 billion package delivery

Let's break down some of the more established niches within the investable universe of space-related companies and become familiar with a few key terms: packages, trucks and primes.

For the most part, the publicly traded companies seeking to profit from commercial space opportunities are focused on the manufacturing, operating and management of satellites (otherwise known as the packages). These companies currently generate $250 billion in annual revenue, making them by far the largest opportunity in the industry. Some companies in this vertical include DISH Network, DigitalGlobe, Garmin, Iridium and SES. They provide satellite services, either through broadcasting, imaging, navigation or communications, and the number of companies providing these services is growing.

Take DirecTV—which is set to be acquired by AT&T for nearly $50 billion this year. If you don't think of it as a "space" investment, remember that it would not exist without its fleet of satellites and the rockets that send them to space.

Another is the Stanford University-born satellite start-up Skybox Imaging. It was recently acquired by Google for $500 million.

Busting the monopsonies

The "trucks" that take the "packages" to space have been large government contractors, such as Boeing and Lockheed Martin. The "primes" generally focus on government contracts—e.g. military and NASA—as key customers for their rockets and satellites.

A shift has occurred in the past few years as companies like Orbital ATK (Orbital Sciences and Alliant Techsystems plan to merge), Aerojet Rocketdyne (owned by GenCorp), Harris and Airbus gradually move away from that traditional model of government monopsonies—one buyer and many sellers—to focus on more scalable, diverse commercial customers. This shift has not only allowed newer, smaller and more agile players to obtain funding from some large investors but also presents more market opportunities for both new and existing players.


You might also like:

Google to invest $1B in SpaceX?
Google to invest $1B in SpaceX?
Know Right Now: Google Invests in SpaceX
Know Right Now: Google Invests in SpaceX
Report Google in Talks to Invest $1 Billion in SpaceX - TOI
Report Google in Talks to Invest $1 Billion in SpaceX - TOI
Elon Musk: 10 Lessons In Business, Innovation And Entrepreneurship From The Self-Made Billionaire And Visionary (Tesla, SpaceX, And The Quest For A Fantastic Future)
eBooks ()

Related posts:

  1. Mars 1 SpaceX
  2. Job in SpaceX
  3. Inside SpaceX
  • avatar How come the ships that go to mars don't have to keep their jets on after their initial propulsion? | Yahoo Answers
    • In theory, during its voyage, the ship would be pulled by ALL of the planets, their moons, and the sun. However, the degree of pull varies with the mass of the object and square of the distance.
      As long as the trajectory takes the largest influences into account, all they need to do is assure that the ship and Mars become near enough each other for the ship to be easily trapped in a Mars orbit. Close in to Mars, its influence will be so strong that, while the Sun is quite large, the inverse square law gives Mars a huge advantage.
      The timing is quite tricky, and the trajectory has to b…

  • avatar why don't people make a good enough rocket ship to go to mars or make a robot to go instead?!? | Yahoo Answers
    • As has already been mentioned we have at least two very fine robots on Mars. But to make it possible for humans to make the trip, there are a number of problems. It is a very long way to go and people need to survive the distance and still be in good enough physical condition to move around the surface of Mars. They also need to have sufficient fuel to make the round trip. NASA has been generating plans for such an operation for years and it continues to work on them. For the most current ideas, try going to " and searching the site for topics about Mars. You'll learn a lot about the pr…