Investor interest in space companies remains strong despite no big deals

There is, Christensen said, at least one space “unicorn,” parlance in the VC field for a privately-held startup with a valuation of more than $1 billion. SpaceX has a valuation of more than $21 billion from its latest funding round. Planet, she added, may also be a unicorn, with some estimates of its valuation …

HOUSTON — Despite a lack of “megadeals” involving space companies this year, investor interest in the industry remains strong thanks to several factors, according to one assessment.

Speaking at the SpaceCom Expo here Dec. 5, Carissa Christensen, chief executive of Bryce Space and Technology, said there’s been a consistent level of overall investment activity by venture capital firms into the industry this year.

So far in 2017, she noted there has been no so-called “megadeals” involving emerging space companies unlike the previous two years. In January 2015, Google and Fidelity led a $1 billion round in SpaceX. In December 2016, SoftBank led a $1.2 billion round in broadband satellite constellation company OneWeb.

“We haven’t, in 2017, seen the same size megadeal,” she said, adding that the $2.4 billion acquisition of Earth imaging company DigitalGlobe by MacDonald, Dettwiler and Associates, now called Maxar Technologies, might qualify. “But we have been seeing a consistent investment by VCs in 2017.”

Christensen didn’t give an estimate on the amount of investment in space companies in 2017 to date, but she noted that total investment in so-called “start-up space” companies totaled nearly $3 billion in each of the previous two years.

While 2015 and 2016 had similar total investment levels, she said the number of investors dropped in 2016, but with larger deals. “That may indicate a degree of maturity,” she said. “Instead of money going into early stage startups, there are more deals focusing on maturing companies that appear to be hitting their milestones and achieving success.”

There is, Christensen said, at least one space “unicorn,” parlance in the VC field for a privately-held startup with a valuation of more than $1 billion. SpaceX has a valuation of more than $21 billion from its latest funding round. Planet, she added, may also be a unicorn, with some estimates of its valuation at slightly more than $1 billion.

“Those valuations are very attractive to investors, and tend to help to support he investment thesis that space businesses are worth investing in,” she said.

That surge in funding in the last few years, particularly by VC firms that previously showed little interest in the space industry, can be linked to three trends, she said. One is that technologies like small satellites have made space more affordable to new ventures. A second factor is the potential for “massive returns” from applications like data products from satellite constellations that image the Earth every day, as well as satellite broadband systems.

The third factor has less to do with finances than with what she described as “billionaires and the stories that they’re telling” about the industry. Investments by people like Jeff Bezos and Elon Musk in space companies “has changed the narrative around space,” she said, discussing conversations she’s had with venture capitalists. “Because SpaceX was able to raise money, that opened the door in their partnerships to look at space ventures as potentially feasible businesses.”

However, Christensen warned that roughly three-quarters of all VC-funded companies eventually fail, and there’s no evidence that space companies will be immune from such failures.

“Not all of these businesses are going to succeed,” she said. “The failure of one high-visibility space business does not mean that the investment thesis is invalidated. It’s to be expected. That said, the failure of one high-visibility space business that’s attracted a lot of investment will be painful.”

Looking for angel investors? Your business options are limited

Another study published by The Telegraph in 2015 states that financial technology is the most lucrative sector for angel investment, delivering the highest growth out of any industry. Read: Bahrain US trade deal an attempt to squeeze out of financial trouble. According to a report by Lendit, a lending and …

Becoming an entrepreneur used to be a very exciting thing to do in the past. It was certainly easier to have access to capital once you get a creative idea to put into action. Any idea, be it an invention, a technology innovation or just a wild idea.

This is no longer the case.

If you’re planning to start a new venture that is not related in any way to technology, then you’ve most likely got a problem.

Almost every single sector nowadays has become technology-related one way or the other, except very few areas, that is.

So what are the sectors that angel investors look at mostly nowadays?

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Technology is at the centre of almost everything

If you look at the sectors that angel investors look at for investment, you notice that technology is at the very centre of most endeavours.

Angel investors focus on a variety of fields ranging from Artificial Intelligence to Fintech, Internet of Things (IoT), e-commerce, Augmented Reality and others.

According to a recent study by Apoorv Ranjan Sharma, the co-founder of Venture Catalysts, artificial intelligence or AI has emerged as an extremely promising sector for prospective investors. “AI-based solutions, particularly automation technologies, big data analytics, and machine learning tools, are being used by companies across business verticals as diverse as ecommerce, ERP, retail stores, healthcare, and information security to gain a critical competitive edge and ensure continued relevance in the market,” he said.

Another study published by The Telegraph in 2015 states that financial technology is the most lucrative sector for angel investment, delivering the highest growth out of any industry.

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According to a report by Lendit, a lending and fintech event, “since the beginning of 2014, 1,666 angel investors have invested in fintech accounting for approximately one-third of fintech investment; nine of the 10 most active angel investors in fintech are US-based with Techstars reportedly the top investor by deals at 33.”

Healthcare tech

Healthcare tech companies are also the centre of attention for investors.

In the first three quarters of 2017, four of the US Midwest’s five largest deals involved healthcare tech companies, as reported by Forbes. It said that these four deals brought in $870 million in investment.

Even the UAE has caught the tech bug. How?

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UAE, a hub for tech startups

The UAE is known to be a hub for entrepreneurship in the region. The ecosystem has grown tremendously in the past few years according to Wamda, a platform that aims to accelerate entrepreneurship ecosystems throughout the MENA region.

According to CB Insights, a technology analysis site, the country is now home to two unicorn companies that were each valued at $1B in 2016. “The ride hailing company Careem Networks reached unicorn status in December and the e-commerce company Souq.com received a billion dollar valuation in February,” it said.

Using the CB Insights database, it was noted that there are at least 32 well-funded tech startups in the UAE, half of these e-commerce focused and located in Dubai.

Non-tech angels

Entertainment and renewable energy are investments that are not directly related to technology.

Hackernoon, a platform for technology news, cites a 2016 report by Martin Prosperity Institute, saying that software sector in the US has around 36 percent of the VC investment with a value of about $12 billion, whereas, media and entertainment comprise 9.5 per cent. It said that media & entertainment sector managed to secure $881 million by closing 114 deals.

According to Startup Explore, a European startup funding community, investors have lately increased their interest in renewable energy startups, with more than $2.1bn invested since 1999 in 215 deals.

“According to the report, investment in such companies will hit $400 to $500bn by 2020,” it added.

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Asia now home to 75 unicorns as sharing economy takes off

1, according to U.S. research firm CB Insights. Their aggregate appraised value topped $763 billion. Close. Uber is the biggest unicorn of them all at $68 billion. These outfits are named after a mythical creature because they used to be so rare. But they currently inhabit 22 countries worldwide. Africa has …

TOKYO — Asia now has about 75 unicorn startups, accounting for 40% of the global total by value, a feat made possible by the region’s booming on-demand industry — especially in China.

Founded in 2012, Didi Chuxing Technology now boasts over 400 million users of its popular ride-hailing app. Last year, the Chinese startup bought out the mainland operations of U.S. rival Uber Technologies. The app has penetrated so deeply that it is now often difficult to find a regular cab in China.

“I use [Didi] whenever I take a taxi,” said a Beijing resident in her 30s. “It’s very convenient because you can pay by smartphone.”

Globally, there were 220 unicorns — unlisted startups worth over $1 billion — as of Dec. 1, according to U.S. research firm CB Insights. Their aggregate appraised value topped $763 billion.

Uber is the biggest unicorn of them all at $68 billion. These outfits are named after a mythical creature because they used to be so rare. But they currently inhabit 22 countries worldwide. Africa has three.

China dominates Asia with 59 unicorns. Didi leads the way with a valuation of over $10 billion. The roster also includes smartphone manufacturer Xiaomi, drone maker DJI, bike-sharing giant Beijing Mobike Technology, and China’s answer to Airbnb — Tujia. The companies are actively developing offshore markets as well.

India’s e-commerce kings

India has 10 unicorns. E-commerce retailers Flipkart and Snapdeal are the two most valuable. Flipkart is the eleventh-ranked unicorn in the world at $11.6 billion, but the biggest e-tailer in India, beating out U.S. giantAmazon.com, which ranks second in the South Asian country.

Flipkart launched its MarQ private label for home appliances this October, selling 24- and 32-inch televisions under the label, with a 40-inch model on the way. The company is also said to be considering a stake in an online ticket seller.

One97 Communications, which runs the Paytm electronic payment service, and ride-hailing startup Ola,also known as ANI Technologies, enjoy a wide following in India as well. Japanese telecommunications giant SoftBank Group holds stakes in India’s top four unicorns, highlighting the enthusiasm from international investors.

Hyperlocal in Southeast Asia

Southeast Asia, home to more than600 million people across 10 countries, has three unicorns. Two are ride-hailing companies: Grab, a Malaysia-based company whose main market is Singapore, and Indonesia’s Go-Jek. Rounding out the trio is Traveloka Holding, also based in Indonesia, which runs an online travel-booking portal.

The region used to boast four unicorns, until Singaporean tech venture Sea, formerly Garena, went public on the New York Stock Exchange in October.

What makes Grab and Go-Jek unique are their fleets of two-wheelers and other services tailored to local needs. The two startups also deliver food and other items, which one chief of an Indonesian online retailer says is “bringing about a revolution in e-commerce.”

Grab offers three-wheeled vehicles with sidecars in the Philippines, and multipassenger wagons in northern Thailand modified from pickup trucks. The company is providing “hyperlocal” services, said Brian Cu, the head of Grab Philippines.

Japanese unicorns, an endangered species

But Japan, a traditional technological leader, is largely missing from the picture. CB Insights only notes Tokyo-based Mercari, which runs a trendy virtual flea market. The Next Unicorn survey, conducted jointly by The Nikkei and the Japan Venture Capital Association, also identifies Preferred Networks, a Tokyo artificial intelligence company seen valued at over 230 billion yen ($2.05 billion). Given Japan’s economic standing, its lineup of unicorns does not compare favorably with those of emerging nations.

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