Episode Transcript
The following transcript has been lightly edited for clarity.
Sam Tortora: Welcome to Off the Exchange, a new series from Nasdaq Private Market where we go beyond the headlines to talk about the sectors and themes shaping the private company ecosystem. I’m Sam Tortora, and here’s our first episode.
Sam Tortora: SpaceX IPO’d last month, and it’s dominated every conversation about the space economy for more than a year. So today, we’re looking at everything else. I’m joined by Justine Fisher, who leads space industry coverage for Nasdaq Private Market. Let’s get into it.
Sam Tortora: SpaceX really put the space economy on the map for a much broader audience. Could you start by telling us a little bit about the areas of the space economy that SpaceX has driven, and how that opens up other subsectors in the private market?
Justine Fisher: You’re right that SpaceX put the space economy on the map for equity investors this year — and it actually, literally, put the space economy on the map for years before that by opening the space economy up to companies working on a vast array of projects. Before, access to space was quite limited and dominated by government-related companies. What SpaceX has done is build bigger and bigger reusable rockets to bring the cost of launch down significantly.
Justine Fisher: We think about the cost of launch in terms of cost per kilogram of payload. Historically, these costs have run up to the thousands of dollars per payload — even close to $20,000 or $30,000 per kilogram. What SpaceX is trying to do is get this well below $1,000 a kilogram. And once the cost of launch is so low, you can launch a lot more things into space.
Sam Tortora: Justine, you mentioned payload, and getting the cost per kilogram of payload down. What exactly is a payload, for those of us who don’t spend our days in the language of the space economy?
Justine Fisher: The payload is the part of the satellite that actually performs the mission the satellite was sent to space to do. A satellite has two components. The first is the bus — the infrastructure of the satellite. It controls things like power and propulsion, and also the way the satellite moves in terms of orbit and altitude. The payload actually does the job of the satellite: technology that either collects information and relays it back to Earth, like Earth observation, or sends communication signals to Earth, or even does computation or performs experiments.
Justine Fisher: When SpaceX opened up the launch side of the space economy, we saw the development of Earth observation companies — companies that use various satellites to observe what’s going on on Earth and send that data back so it’s usable for things like analyzing climate change or analyzing changes in oil inventories. We’ve also seen the development of communication from space. Everyone knows, with Starlink, that SpaceX is quite dominant in this area, but there are other companies trying to develop communication capabilities from space so that we can potentially move outside of the traditional cell phone carriers in the future.
Justine Fisher: Now, the more things we launch into space, the more we need satellite buses to carry our payloads into space. So there’s been an industry of satellite bus manufacturers — the bus is the thing that holds the payload — and this manufacturing industry has grown as well. The more satellites we need to launch for things like Earth observation and communications, the more satellite buses we need to manufacture. So SpaceX’s liberalization of launch has also created a satellite bus manufacturing industry. That’s huge.
Justine Fisher: Also, the more satellites we have in space, the bigger the need for logistics in space. We need to be able to move objects around so they can avoid colliding with one another. And for SpaceX, a lot of satellites share the same area on a large rocket that goes up, and they need to be repositioned when they get into space. So there’s a space logistics industry that’s been created. And then, of course, many of us have heard about an industry that’s probably a little farther in the future — space-based orbital compute, if we ever put data centers in space. So really, the work SpaceX did on the launch side has opened up the economy to a lot of different options.
Sam Tortora: Super interesting to learn about all of these other subsectors that have been made possible by bringing the cost of launch down. Which of these feels furthest along in commercial maturity?
Justine Fisher: If you look at most of these subsectors, they’re quite far along commercially. There are public Earth observation companies like HawkEye 360, and Planet Labs has been public for a while — that’s a real industry. We’ve been using that data for everything from the environment to commodity analysis to even warfighting. So I would argue that industry is quite developed.
Justine Fisher: The communication side is also developing very quickly. SpaceX partnered with EchoStar in order to release spectrum from EchoStar. We’ve also seen that Amazon is going to acquire Globalstar, and Rocket Lab, another space company, is buying Iridium — these are companies that own spectrum that enables communication from space. AST SpaceMobile is a public company also working on this. I would say that industry is probably a little less mature than Earth observation, because managing spectrum and consumer devices is just a little more difficult — but it’s definitely getting there, and it’s definitely come into focus.
Justine Fisher: I would also say that satellite bus manufacturing is quite advanced, and logistics is getting there. So a lot of these industries are at the early stages of commercialization, but a lot of them are not science projects anymore. They are real commercial industries with a need that has been identified by large companies working on large projects in space.
Justine Fisher: I think some people may remember that SpaceX had been focused on Mars for a really long time, and they’ve walked back some of that language to now focus on the lunar opportunity and the Moon. That’s probably the most science-project-like area I can think of, just because we all know there’s not really an economy developed on the Moon now — it’s early stages. The rest is moving forward at a commercial scale.
Sam Tortora: So for investors watching this space over the next 12 months, what do you think they should actually be paying attention to?
Justine Fisher: I think you might see a few trends start to emerge — and obviously, whether they emerge depends on market conditions that might or might not encourage M&A. For example, maybe two or three years from now, we might see some consolidation among Earth observation companies, because we see people playing in different verticals of Earth observation — whether it’s radio frequency or taking pictures — and there could be some real synergies from combining some of those capabilities in the future.
Justine Fisher: Investors should also look at satellite bus manufacturers. There are a lot of companies working in this arena, and probably not all of them are going to be around a few years from now. So investors should start to think about exactly what method or approach to satellite bus manufacturing they think is going to be the winner.
Justine Fisher: On the communication side, as I mentioned before, this is still pretty nascent as far as the number of people on planet Earth who use space-enabled cell phones. But again, there are a lot of big companies working on this. AST has partnered with terrestrial operators, Starlink is there, Amazon has acquired spectrum via Globalstar and is building a communications constellation, and Rocket Lab acquired Iridium. So this is a space to focus on for growth — and not growth from startups; it’s growth from large, deep-pocketed companies that see the huge opportunity here.
Justine Fisher: From a logistics perspective, I think defense is the main focus. A lot of space companies have started to frame themselves as dual use, because not only is there a commercial space economy that has developed as launch costs have come down, but it’s hugely important for defense — the way we fight wars and the way we communicate around wars. So the logistics sector is not only important for moving objects around on the commercial side, but for dogfighting in space. The defense angle of logistics is probably going to become more important going forward.
Sam Tortora: That’s so helpful. Thank you so much, Justine. Where are the places in space where some of this exploration and this work can actually take place?
Justine Fisher: It’s a good question, Sam, because we can launch things from Earth into space, but it’s very helpful to have other bases in space from which to launch other projects — or, as you said, do the work in space. The two places we’re focusing on now are the International Space Station and the Moon. The International Space Station is going to be decommissioned in 2030, so there are already companies working on a commercial replacement — a public company like Voyager Space, or private companies like Axiom Space or Vast.
Justine Fisher: There are also companies focused on the lunar economy. We know there’s really nothing on the Moon right now, but a lot of companies are focused on doing work on the Moon and using it as a base. You have, for example, Intuitive Machines, which has a lunar vehicle, and also Firefly, which is possibly better known for its launch capabilities but is also developing a lunar vehicle. The development of these areas is going to be important for the work we do in space, say, 10 or 15 years down the line.
Sam Tortora: A rapid-fire question for you: what are some of the names of the private companies in the space sector that we should know about?
Justine Fisher: It’s hard to make that a rapid-fire answer, because there are so many different subsectors of space. On the launch side, with private companies, there’s Blue Origin, which is owned by Jeff Bezos. There’s also a company called Stoke Space, which is working on very low-cost reusable rockets, and Astra Space, which is working on disposable rockets that are also much lower cost per payload.
Justine Fisher: On the satellite bus manufacturing side, there are companies like K2 Space, Apex, and Sierra Space that are the larger ones in the industry. In logistics, there are companies such as True Anomaly and Impulse Space that are working to help move satellites and other objects around in space. On the space station side, Voyager is a company that went public this year, and private companies working on this include Axiom Space and Vast Space.
Justine Fisher: And finally, on Earth observation, a lot of the sector is actually public, as I mentioned — Planet Labs, HawkEye 360, and others. ICEYE, which is a European company, is the largest private Earth observation company still out there. Earth observation companies have been able to go public because we see the result of what they do. Even if we can’t see what they do, the result is very tangible — it’s pictures, it’s data, it’s communication that helps us perform tasks on Earth. And so maybe that’s given those companies a bit more of a license to go public.
Sam Tortora: Well, thank you so much, Justine. This has been fascinating — I’m so much smarter on space than I was before this conversation, and I look forward to having you back to learn more about space and the other areas you cover at Nasdaq Private Market.
Justine Fisher: You’re welcome. Thanks for having me.