There is a significant lack of publicly available Market Research about the NewSpace Industry in Germany. At Capitol Momentum, it is our goal to close this information gap and begin to map the German NewSpace landscape. We are aiming to increase market transparency and raise awareness for NewSpace technologies in order to integrate them with traditional industries and give a clear, overall picture of the market. This report is a joint project of Capitol Momentum, BDI and NewSpaceVision.
2020 was characterized by many challenges. The COVID-19 pandemic led to numerous national lockdowns that resulted in increased bankruptcies and payment defaults. In addition, 37 conferences were cancelled or rescheduled in 2020. While a lot of industries have switched to remote working, the German NewSpace industry was only partially affected. The Downstream, Software and Consulting companies remained mostly unaffected, but parts of the Upstream domain faced disruptions due to delays in production (i.e. Ariane 6). Despite many predictions of industry experts, the wave of bankruptcies and investment pullbacks did not yet become reality for Germany, as no significant rise in liquidations were noted for the German NewSpace industry until the end of Q1/2021. One reason for this may be the suspension of the obligation to file for bankruptcy, which was specifically implemented for German companies that suffered from a loss in sales due to the pandemic.
For this report, we have researched facts and figures on 125 German NewSpace companies of which 92 were analyzed financially. Throughout this report, we use the term German NewSpace Industry interchangeably for these startups, knowing that not all German NewSpace ventures are covered in our scope. Looking at financial fundamentals, the conservatively estimated revenue figure of 2018 for in-scope companies totalled €873m, of which the Upstream sector made up 79%, Downstream 18% and Other 3%. In perspective to the entire German Space economy, German NewSpace in 2018 already makes up 30%. In 2020, the number of employees for German NewSpace in-scope companies approached 3,000, with most of them employed in the Launch sector.
The long-term asset investment in the 92 unique startups accumulated to €204m in 2018. The cumulated book value of equity investment hit €206m in 2018. The majority of the companies possessed a critical level of liquidity in 2018, which reiterates the fact that venture capital and public grants play a crucial role in this young ecosystem.
A deep dive into the past two decades not only revealed 17 exits but also uncovered 54 funding rounds. Despite the challenging economic environment in 2020, we observed increased investor interest, as venture capitalists invested in at least 7 German NewSpace companies. The cumulative venture capital investment for the top deals of 2020 amounted to €308m which is an increase of a multiple of 1.83 compared to 2019. Deal making has increased not only due to excess liquidity, but also because of the continuing low-interest-rate environment.
A surge in demand for NewSpace products was noted in the Upstream market from 2017 to 2018 by a factor of 127%. This was outpaced by the demand increase seen in the Downstream segment by a remarkable factor of 136%. The growth in demand is not only driven by space customers. Demand was also attracted from traditional Non-Space industries such as Agriculture, Logistics, Insurance companies, Energy, Oil & Gas and the Pharmaceutical industry to which 76% of German NewSpace businesses could sell their products and services. Overall, we observed a very dynamically growing industry reflected in an increase in workforce, revenue, asset investments and customer traction. Not only could German NewSpace products attract demand, it also received increased attention from retail investors that drove resources into the economy.
There is tremendous value in already existing key technologies just waiting to be unlocked and added to countless industrial Non-Space use cases. For an industry that has just started to become commercialized, and in light of the positive developments over the past 2 years, there will be enormous
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Capitol Momentum is a Berlin-based research and consultancy company, specifically focused on the German NewSpace Industry. With our research products, we aim at increasing the market transparency for international as well as German Angel and Venture Capital investors. We provide an overview of the various actors in the ecosystem and their interesting business solutions for B2B customers from traditional Non-Space industries, unlocking the true value of products and services along the Upstream and Downstream value chain. As industry analysts, we track more than 125 German NewSpace Hardware and Software companies and produce Reports on the German NewSpace Industry, its Investors as well as Peer Group, Competitor, Trend and Market Segmentation analyses tailored to your specific information needs.
