Head of innovation finance advisory at the EIB Shiva Dustdar, pictured, says the first finance for space forum could be held within the coming months
The European Investment Bank hopes to boost Europe’s place in the newspace race by launching a finance for space forum. The first meeting could be held in Luxembourg in the coming months.
The knowledge-sharing platform would serve as a think tank for pilot projects, bringing together policy-makers, newspace companies, institutional players and more up to three times a year at different locations around Europe.
“Europe has been at the cutting edge. It’s been number 2 in the space race, following the US,” Shiva Dustdar, head of innovation finance advisory at the EIB, told Delano ahead of its launch at a space policy conference in Brussels on 22 January. “I feel a bit nervous if we don’t act fast enough and make a real commitment to the sector, we could become marginalised in this global space race,” Dustdar said.
The forum is among five finance-related recommendations outlined in “The future of the European space sector”, an EIB study commissioned by DG Growth serving as a “supply and demand gap analysis” for financing among European newspace actors.
It would serve to fill the knowledge gap between newspace actors and potential funding sources, which was identified in the report. “The knowledge gap often comes from different places. Companies often don’t know where to go for funding. This is a problem—Europe faces fragmentation,” Dustdar said, adding that investors also lack understanding, which contributes to a funding gap in Europe.
The report found that space ventures have attracted over €14.8 billion in investment since 2000. And it showed massive growth in investments in space ventures, rising 80% from 2000-2005 and 2006-2011, and a remarkable 347% from 2006-2012 and 2012-2017. But, the majority of investor finance comes from the US. “In fact, US-based investors account for around two thirds of the 400+ worldwide investors in space companies,” the report executive summary reads.
Seed-stage support mechanisms in Europe exist, for example in programmes like the European Space Agency business and incubation centres. However, early-stage investment remains small and “fragmented” and “only specific space segments are covered.”
Specifically, the report identified a gap in space-focused private funding for early-stage and growth phases. “The total volume of investment lags far behind when compared to private investment in the US,” it read, adding that the funding shortfalls posed a risk for the “commercialisation of space technologies in Europe.”
In addition to public programmes, philanthropic funding initiatives need to be created, Dustdar said. “We don’t have the depth across the venture capital market, we don’t have the Jeff Bezos of the world.”
Among possible future strategies Dustdar envisages are an adjustment in procurement approaches, breaking down regulatory barriers and working in a more joined up and less prescriptive manner, as well as taking steps to change mindsets among bankers, investors and the general populous about the earth-based applications of many of the newspace activities.
This, Dustdar says, will all help to unlock potential financing and keep European newspace startups in Europe. “A lot of it is about joining up the eco-system, not to work at national level only and think how do I help my own space sector, but how to make sure companies in my country have good access to all of the various schemes,” Dustdar said.
The report was compiled from interviews with around 40 newspace firms across Europe, including Luxembourg-based satellite-operated data company Spire. For the report, the EIB also drew on its experience with newspace firms in Luxembourg where it serves an advisory with the. SpaceResources.lu initative, a government-led scheme to create an eco-system in the grand duchy for space mining.
“What’s nice is so far speaking to LSA, SES and some of the newspace companies here, there’s quite a lot of interest to be part of this,” Dustdar said of the forum.