Space investing goes mainstream as VCs ditch the rocket science requirements | TechCrunch

Five years ago, investor Katelin Holloway made what she called a “literal moon lens.” Founding partner of General Venture Capital Seven six Acknowledges that she and her team “don’t know” Rockets Stock Space Talk about when they will reusing the company’s launch technology. “We know we are not experts,” she said.

Since then, Holloway has invested Interluneone plan Harvest Helium 3 Sold from the moon to Earth for quantum computing and medical imaging applications.

Holloway is well aware of the suspicion that these bets may attract. Meanwhile, her journey from space novice to investor reflects a bigger change in venture capital, as VCs without aerospace engineering degree are increasingly returning to space startups. In fact, global investment in space technology has reached $4.5 billion for 48 companies As of July, according to PitchBook; that’s more than four times the number of space startups attracting in 2024.

What drives this trend? For beginners, SpaceX and other companies significantly reduce release costs, which allows founders with an application-centric business model to access the space. “Literally, we are exactly a species sitting on a cliff in space and becoming part of our daily lives,” Holloway told the editor in a recent episode of TC StrictlyVC Download Podcast. “And I really don’t think the world understands or is ready for it.”

This allows VCs to look for companies from the past that make new applications such as climate monitoring, intelligence collection and communications, to build rockets to startups using space-based data and infrastructure. They also bet on orbital logistics, space manufacturing, satellite services and the development of lunar infrastructure. Companies like Interlune represent this new category. For investors like Holloway, the appeal is often at the intersection of “space technology meets climate technology,” meaning startups who want to avoid repeated Earth’s environmental errors in space. ”

Geopolitical tensions also make defense-related space startups attractive, as China’s rapidly growing space capabilities are driving increased U.S. investment. Venture capital can be tense, and defense spending – understanding the U.S. government provides a reliable customer base and validation for emerging technologies – gives them greater confidence in the commercial viability of space venture capital. Secretary of Defense Pete Hegseth said at the Air Force Summit Department in March: “I don’t think there is a way to ignore the next and The most important area of ​​war Will be the space domain. ”

This year, many U.S. defense-centric space startups shut down considerable rounds, including military class orbital system developer True Anomaly, the reaction announced $260 million The C series led by Accel in July; satellite maker K2 Space, which is currently performing its first government mission and shut down $110 million round In February, it was co-led by Lightspeed Venture Capital and Altimeter Capital. The defensive angle adds the luster of space investments, which seem to be too risky. In fact, Holloway pointed out that the gas 3 helium 3 harvested by Interlune also has national security applications, including detection of nuclear weapons movements.

AI is creating more momentum, including the intersection of geospatial analysis and intelligence. For example, in March, the first satellite launched from Fire Sat was a partnership between Google, the nonprofit Earth Fire Alliance and satellite builder Muon Space, which aims to detect wildfires in orbit. The collaboration was announced last year Plan to deploy more than 50 satellites Designed for wildfire detection. Earth Imaging Operator Planetary Laboratory also has Cooperate with humans Analyze Earth observation data.

Perhaps most striking is that the timeline of these ROIs has been reduced to a surprising degree. Traditional space companies need decades to generate returns, but today’s venture capital firms believe they can achieve liquidity within a standard 10-year fund horizon. “Our fund model has not changed, so we still have a 10-year vision,” Holloway explained. “We wouldn’t make this investment if we didn’t think we could generate great returns in 10 years.”

This scheduling sounds ambitious, but for these new space companies, the public market seems to be easy to accept. Space infrastructure company Voyager Listed in New York in June The market capitalization is $1.9 billion and it has risen 82% from the initial public offering price. (Its stock has since fallen about 45%.) 48-year-old space system maker Karman Space & Defense, maker of 48 years old space systems More than 30% of its listing price In February. (Its stake has increased by nearly 60% since then.)

For Interlune, Holloway envisions potential exports, including strategic acquisitions from aerospace or defense giants, purchases from purchasing energy companies, and even government acquisitions, given what she describes as national security implications.

All of this converging powers—a compressed schedule for cheaper launches, defense spending, AI applications and return schedules—reshapes people who can invest in space. Holloway’s background – from public school teachers to Pixar scripting supervisors, to Reddit’s People & Culture vp of People and Culture, to venture capitalists – highlights the broader skills these companies actually need. Although she was self-respected in harvesting physics, she brought the surgery.

“At the end of the day, a company is a company,” she said. “If you bring humans together to build something that works hard, you need someone with background to build strong companies.”

Whether this method will pay off remains to be seen. The space economy remains largely untested, and many of these ambitious businesses face technical and regulatory hurdles that more traditional software startups have never encountered. But with more generalist VC betting like Holloway, Space is starting to look less like a professional niche than another buzzing field, and if you have knowledge of operations, you don’t need a degree in aeronautical engineering.