Deeptech insights that matter from Robot Pigeon
Conquering the final frontier. (7 minute read)
What travels at 2,340,000 mph?
Each month we go deep with an opinion piece and offer up seven other things we think you’ll find useful or interesting. This festive month - a birds eye view of the new space economy.
Wishing you a very Merry Christmas,
Andrew S, Andrew G, Harry, Jeff and Rebecca. Unsubscribe any time here.
The Final Frontier.
(7 min read). This October saw a big technical milestone for Space-X, the global leader in space launch, as its 80 metre tall Starship booster landed autonomously on “chopstick" arms protruding from its launch tower. It made national news around the world, deservedly so as it's impressive to watch - a sequence worthy of any Hollywood blockbuster. Rarely does reality catch up to science fiction.
The space economy is projected to grow 41% over the next five years, hitting >$1 trillion by 2030. 86 countries invest in space activities of some description.
The U.S. is top dog, putting around 6x more funding into its government space programs than Europe, or about ~$60 bn annually on space (of the ~$5 trillion U.S. total annual government expenditure). Elon Musk’s SpaceX, a trailblazer which catalysed the private space sector globally, has helped the U.S. retain leadership, a position it has occupied since Apollo 11 first landed humans on the moon 56 years ago.
But the space race of today is different. The total number of astronauts or cosmonauts launched into space has fallen from around 50 each year in the 1990s to around 12 per year today. In the same period the number of objects launched into space has risen 10-fold. From materials testing to advanced Earth observation platforms and a new generation of satellites - some operating in orbits which previously have been unfeasible - the whole industry is expanding rapidly.
Objects orbiting Earth. Many fear a future cascade effect of objects colliding; the Kessler syndrome.
Getting into space.
In the Space Shuttle era getting a bag of sugar into space would have cost you more than $50,000, but the promised drop to “$100 a kilo” from today's ~$5,500 largely hinges on a regular and reliable Starship service coming online.
Starship: 120 metres tall with 33 engines.
Starship is the most powerful vehicle ever built: 16.7 million pounds of thrust - that’s roughly 600 times the thrust of a Boeing 737. Horse power is not directly comparable but at roughly 700mph (nearing the speed of sound as it ascends) that's about 15 million horsepower. Or 75,000 times that of the average family car. More stunning video here this time of test flight 2.
Many of the new space startup ideas, such as space tugs and in-orbit maintenance need this per kilogram price drop as a prerequisite to success, by enabling customers to scale who will need their services. That said, NASA this year awarded SpaceX a $843 million contract to construct a de-orbit vehicle for the ISS and ESA (the European Space Agency, a consortium of 22 countries) has invested in early development of servicing concepts.
Launch cost will drop but it may take longer than many hope, making market timing critical. Investors see these interdependencies as ‘stacked risk’. First movers often die a death, only for a winner to rise from the second wave, learning from the first and taking advantage of a now educated and larger market. This has happened in everything from social networking with early starters Black Planet, MySpace, and Friendster all beaten by Facebook, to music players - there were at least six MP3 music players before the Apple iPod came along.
To boldly go.
What’s inevitable is that space travel will begin to look very different in the next few years. Reusable rockets are just the start. Decarbonized propulsion systems, asteroid mining, interplanetary crop cultivation, solar sails, electric plasma thrusters and space station hotels are all things we can look forward to, no longer the realm of science fiction.
The U.S. and Europe must harness its wealth of academic talent to build pioneering companies in these innovative areas, or less desirable nation states will charge ahead regardless and begin to own the cosmos.
Thankfully the U.S. is busy doing just that. DARPA, the U.S. DoD’s R&D arm, probably best known for inventing the internet (or more specifically the self-routing TCP/IP protocol) selected 14 companies to participate in a study on building commercial enterprises on the moon. The agency says within 10 years we could see a thriving lunar economy which will need logistics, construction and communication services. For the United States, capitalism in space is already the mantra of this new millennium.
The European and U.K. space sectors remain under funded and arguably slower to develop outside of today’s already commercially mature sectors, such as satellite build.
ESA’s Ariane rocket family has long been Europe’s only medium-heavy lift vehicle if you don’t include the Russian Soyuz programme (which previously launched European Astronauts along with the U.S) but has been interrupted by the Ukraine war.
In October 2023, former NATO chief Anders Fogh Rasmussen urged Europe to increase its autonomy in human and robotic space exploration. He has repeatedly called for a radical European plan to catch up with dominant space powers like the U.S., Russia, China and increasingly, India.
The rhetoric of individual European governments and the E.U. itself is not backed up with sufficient funding or the bold decision-making needed to deliver on the aspirational headlines. Ariane 5 in its heyday provided reliable, good value for money launch. But like so many large scale space projects, ESA’s Ariane 6 was more than two years late when it took off for its maiden flight in June this year.
Ariane 6 is also a rocket of a previous age - not reusable and not built in a more mass-production cost effective way such as SpaceX’s Starship (which is projected to be up to 20x cheaper per launch kilogram than Ariane 6).
Lift off.
U.K. and European launch infrastructure also remains weak. There are ~35 spaceports and launch facilities worldwide that can launch satellites or spacecraft into suborbit, orbit or beyond. Europe has just one, located in French Guiana, operated by France and ESA. China has four active sites within its own borders. The US has 10 launch sites (up to 20 sites if you include horizontal launch or licensed but inactive locations).
ESA recently announced a change of direction, to start “buying” services in an effort to emulate the change NASA already embraced successfully, which started with COTS in 2006. ESA says it seeks a reusable ‘space plane’, but we’ve been here before. The Hermes space plane was Europe's answer to the U.S. Space Shuttle, designed to carry three astronauts, but scrapped in 1992 after only making it as far as a full scale mock up.
Long March 5B, the Chinese heavy lift rocket, poking out from trees looking like a scene from Endor.
China has its ‘Long March’ lift family, of which up to 15 model variations are active with 2 more in development, some are partially reusable. China ranked second for launches (54 orbital missions including 1 failure) in 2023 along with SpaceX (87 orbital launches, all successful not including Starship development launches).
China has put more rockets and payloads into orbit in 2024 than in any prior year. The successful launch count globally will surpass 250 by the end of December. By mass that’s well over ~1,000 metric tons (2.2m lbs) in total. SpaceX has done over half the launches, but over 80% of the mass, which is ~10x the mass put in orbit of all the Chinese launches. This demonstrates the dominant position of SpaceX in the launch market.
Thus far, “launch” through a lens of investor analysis is following the classic monopolistic model popularised in books such as Zero to One.
The dawn of a new age.
Having a reliable launch capability today can be lucrative. SpaceX was reportedly set to hit $9bn in 2024; we estimate ~$5bn is launch revenue and the rest from the Starlink internet access service of around ~2m users. Starlink has been rumoured to spin out from SpaceX to IPO for some time. About two-thirds of SpaceX's launches have carried satellites into space for Starlink.
Amazon's Kuiper internet satellites will drive further growth in launches in 2025. Two Kuiper test satellites went into orbit in November 2023 and Amazon has contracts for 68 more commercial launches (38 United Launch Alliance, 18 Arianespace, 12 New Glenn Blue Origin, with an option for 15 more).
Back in Britain and embarrassingly for Brits, the U.K. is the only nation ever to develop but then give up a indigenous sovereign launch capability. During development of the UK’s Black Arrow program, NASA had offered to launch future British payloads for free. Following the 1971 Labour government’s decision to cancel the program (and the subsequent demolishing of the Woomera launch facilities after only one orbital launch, which was successful) NASA withdrew the offer. Readers may draw their own conclusions, but America has a healthy history of aggressively protecting not only their commercial markets but not everyone is keen Stateside of others having cutting edge capabilities, even allies.
The Prospero spacecraft was launched successfully atop a British Black Arrow rocket from the Australian outback on 28 October 1971. More photos.
In 2010 the UK showed signs of a space renaissance, creating the UK Space Agency from the British National Space Centre. For context, BNSC’s budget in 2009 was a modest £268m versus ESA’s budget that year of £3.3 billion.
As of 2022-23 the UKSA’s budget was £647m, a 60% increase in real terms. But while that budget scrapes the UK into the top 10 government spenders on space, 85% of it goes straight back to ESA. That’s not necessarily a bad thing as ESA collaborations encompass many important missions and projects that UK Space should be part of and could probably not afford solo, but it leaves an almost meaningless £64m for UK national programs.
As so often in technology, it is the U.S. which has embraced the opportunity enthusiastically and ambitiously, the government spending around $62bn in 2022 on space, or around 600x more than the U.K’s nationally directed budget. Speculate to accumulate; an adage about growth that the U.K. seems to have long abandoned as a policy truth.
One of the U.K. Space Agency’s stated aims is to “deliver the first [since 1971] small satellite launch from the U.K. in 2022, and a sustainable commercial U.K. launch market by 2030.” 2022 has been and gone. But Orbex and Skyrora, the U.K.’s two most compelling launch players, are making progress. The U.K. made a splash announcing multiple spaceports in 2018 but the ground in Sutherland, Scotland, planned as Orbex’s home base, was finally only broken in May this year, 6 years later. Skyrora say they’ll launch from their SaxaVord rocket base in Unst, Shetland in spring 2025.
The Unst spaceport taking shape.
We believe the UK government has spread too little money, too thinly into too many initiatives. Instead of encouraging multiple spaceports across the U.K, a competitive tendering process could have resulted in one winner so that all efforts and resources - private and public - could go into making an indigenous launch capability available as soon as possible, as efficiently as possible, and generating revenue.
This is after all what at 7percent Ventures we tell early stage startups to do: focus. Scaling too soon is what kills startups, for many of the same reasons well meaning government initiatives flounder when alleged ambition is not matched by sufficient funding or focus.
This is frustrating for fans of the U.K. Space because despite flawed planning the U.K. punches above its weight in the space sector, reportedly receiving 17% of private space capital investment globally since 2015, putting it behind only the U.S, and probably China. Admittedly a long way behind the U.S. but still ahead of everyone else in the west.
UKSA recently announced it would funnel £65m ($79m) more into early-stage space tech projects, which is welcome but a drop in the ocean. For context in 2002 SpaceX’s Series-A round alone was nearly twice that amount, inflation adjusted.
Live long, and prosper.
Both Europe and the U.K. government need to get their regulatory house in order, ensuring that not just licences for space launch but the entire administrative stack related to space operations is efficient and navigable for private enterprise. The House of Commons Science Innovation and Technology Committee had a few things to say on this topic over a year ago, but little has happened.
We believe government money should be focused more on commercial contracts with startups than grant funding. Early stage investment across the U.K. and Europe is healthy, it is later stage growth funding which is challenging.
The best way to help bridge that gap (beyond potential longer term initiatives such as Mansion House reforms in the U.K.) is for governments to buy more rather than giving money away with grants. After all, SpaceX’s first customer to the tune of $1bn, after their first successful Falcon 1 launch, was NASA.
If you own the domain of space you own planet Earth. With geopolitical instability gathering pace, that fact is sobering. Governments not investing sufficiently would do well to internalise this reality and take action. Being left behind in this new space race is not just a question of an enormous commercial opportunity being lost to those already executing a proper strategy, but raises issues of defence and security which are nothing short of existential.
It was Robert Goddard who said “The dream of yesterday is the hope of today and the reality of tomorrow”. Onward and upward (literally).
We love spacetech. At 7percent we are always looking for the next moonshot pre/seed startup to join our space portfolio which today includes BioOrbit, Perceptive Space, @magdrive, @ThinkOrbital, @LunasaSpace, @spacedotsinc, @charter_space, @InterstellarLA, @danti_ai, @Epsilon3Inc, @zephrxyz and @The_TrueAnomaly.
Portfolio news.
Business class.
Beyond Aero closed a $20m Series A, co-led by Giant Ventures and BPI France, as it continues to pioneer the development of the world’s first hydrogen-powered electric business aircraft. It has so far secured LOIs for over 100 of its ‘One’ aircraft - designed to carry 8 passengers for 800 nautical miles - representing nearly $1bn. The company completed France’s ‘first’ manned fully hydrogen-electric flight in February this year - see video here.
Roses on the moon.
Interstellar Labs introduced their new BioPod: Model Orion designed for intensive and sustainable production of plants and high-value botanicals.
Model Orion offers 200m2 of AI-controlled high precision climate, with the capacity to produce over 10 tons of output per year. CEO Barbara Belvisi also featured in Apple TV+ documentary FORTITUDE : Forging the Trillion Dollar Space Economy produced by the award-winning Torsten Hoffmann.
Holding governments accountable.
Stotle’s, the platform to identify & win public sector contracts, found a string of new contracts for Rydon, the construction firm which oversaw the refurbishment of Grenfell Tower. They prove that Rydon has continued to win tens of millions of pounds worth of public sector work. The government imposed bans on Rydon in the wake of the fire, citing “considerate responsibility” for the deaths of 72 people. Read more in The Guardian.
Strike a pose.
Alice Camera started shipping its AI-powered Micro Four Thirds camera on July 15th this year, having reached nearly $1m in pre-order sales.
The camera has already been reviewed by the likes of TechRadar, Micro Four Nerds, All The Gear No Idea, and RED35, and, alongside Betaworks, recently demonstrated its embodied intelligence, with the camera controlled by voice and a large language model.
The perfect Christmas present! Pre-order yours using the following link to get a limited time discount of $500 - here.
The tightrope of green aviation.
Completed its first public demonstrations of electric aircraft powered by Greenjets propulsion at Farnborough, the World's largest airshow.
Greenjets’ Sycamore propulsion system aboard Sentinel’s cruise drone at Farnborough Airshow
This quarter, the company also powered the airship that filmed Jaan Roose’s attempt to set the world record for completing the longest ever slackline, running 3.6km across the Messina strait from mainland Italy to Sicily.
Pulling the rabbit out of the hat.
Nu Quantum unveiled Project IDRA with the NQCC (National Quantum Computing Centre). It is the first phase of a 4-year project to build a pioneering optically connected, multi-node distributed quantum computing system. The team also recently partnered with CERN’s White Rabbit Collaboration to enable quantum networking with precise timing.
Make money doing nothing.
Quetzal Finance has just launched its treasury management solution, offering startups an interest rate of 4.42% (AER variable, capital at risk) using BlackRock MMFs, with even higher rates for larger balances. Enquire here to learn more.
Gate(s)ways to mental healthcare access.
LimbicAI Founder/CEO Ross Harper featured on Bill Gates’ new series What's Next? highlighting the leading edge approaches at the intersection of AI in mental healthcare and how Limbic’s support for clinicians is already impacting hundreds of thousands of global patients.
7 things we like this month
Our good friend Dan Goldin - NASA’s longest tenured director launched Per Aspera, a community for those “who value action over talk, creation over consumption, problem-solving over doom-scrolling”. All in the name of accelerating the deep tech renaissance.
Alex Chalmer’s reality check on “how well-intentioned tax breaks spawned an ugly industry” A parody of venture.
An incredibly open and honest account from our portfolio founder Josef Chen on How breaking invisible family pacts forge unstoppable founders.
The EU-Inc Policy Proposal aims to streamline incorporation, management processes, and fundraising for innovative businesses across Europe. Over 13,000 people signed the petition for it.
A techno-optimistic view on why the data-center-driven rising demand for energy, will be a good thing for the climate - an article by Ben James.
Wait a minute doc, are you telling me you built a time machine? Welt & Marktlink Capital’s Jaap Vriesendorp outlined his thoughts on a time machine approach to investing in Venture Capital, that allows us to diversify both entry valuations and exit windows.
Go into space with astrophysicist John Mather, a Nobel Prize winner for his work on the COBE satellite and a key figure in the James Webb Space Telescope project. It’s a great listen.
Our news
7percent was awarded a ‘Most Influential Deeptech VCs’ prize as part of Intel Ignite’s farewell party in London.
Goodwood Revival - we hosted 50 portfolio founders, LPs and GPs for a very rainy day out.
7percent’s early Christmas - including presentations from Greenjets, Interstellar Labs and Gensyn, a fireside with Izzy Fox (Molten) and Mukul Mohanty (Truffle Capital), as well as a fascinating fireside with Tom Salberg MBE on geopolitics and the threat of further conflict.
Santa’s sleigh would have to travel at approximately 2,340,000 mph to deliver all the presents on Christmas Eve. More festive facts here.
See you in 2025!
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