Dave (8:35)

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Maria Varmazas (9:23)

Our guest today is Chad Anderson, founder and Managing Partner at Space Capital. Chad recently shared an article, which we've included for you in our show Notes that looks at the trends in space and particularly in investment that he sees for 2025. He and I started off talking about how the new US Leadership may impact the space industry.

Chad Anderson (9:46)

I think you know under the new administration there is going to be a greater focus on the space economy and in integrating commercial capabilities into government programs. And I think SpaceX is likely to be the biggest beneficiary here. But it's not just because Elon is first buddy and was a big donor to the campaign. Is obviously very involved in the administration and influential in the administration. All that's going to help. But I think the biggest factor here is that there's more of an emphasis on using, on leveraging commercial capabilities for lower cost. And SpaceX has the best solutions out on the market. So it's kind of hard to argue that you should not, you know, when you're looking for these things that SpaceX isn't the obvious choice. And so I think a lot of benefits going to go their way. But at the same time there is more competition coming online. There's more competition from Rocket Lab and Blue Origin on the launch side. There is more competition on satellite communications. We're seeing Amazon, Apple and others really other big telco companies getting into that scheme as well. So there's more competition at the same time. And competition is good for everyone.

Maria Varmazas (11:06)

Absolutely. The rising tide lifts all boats, but really ships in this case. Indeed. And you have a really fantastic roundup on Yahoo Finance. About some of your predictions for the coming year. I'm going to make sure we link it for our listeners and viewers so they can take a look for themselves and get an in depth look at what you've written. I want to just pull a few things out of it because it was a very fascinating analysis. One of them was about the implication of Starship coming online. We're eagerly awaiting the next test as we record this one, this episode. Starship is amazing. I mean how much hyperbole can one say about it? But we're expecting a lot of cool things to happen with Starship this year. Give me a sense of what you're predicting.

Chad Anderson (11:45)

The entire space economy as we know it today, right is underpinned was enabled by SpaceX. We've been operating in space for decades. It's only recently become a category for investment and entrepreneurship by SpaceX and their Falcon 9. That Falcon 9 has ushered in $300 billion of investment capital, 2,000 unique space companies all on the heels of what SpaceX has done. And Starship promises to have the same type of impact. So like things are accelerating, things are growing. The space economy is on a, on a big growth trajectory and Starship is really just going to throw gas on that fire. This is like nothing we've ever seen before in space. The amount of payload capacity that it can launch at price points, that they're talking about launching them with a fully reusable system is really going to change the game. It's going to accelerate growth in existing markets, it's going to enable entirely new markets and it's going to make a lot of existing infrastructure obsolete. And on this next, you know, they got to a monthly launch cadence on this test program, which is pretty wild to think about and unparalleled and they're looking to double that this year.

Maria Varmazas (13:00)

I believe it. It's going to be quite amazing to watch this year. When I think of Starship, I can't help but also think of sls. Is SLS in trouble?

Chad Anderson (13:10)

There is a philosophy that's gone through NASA for decades and I think there's a lot of sense in it that you want to have a dual path approach where you want to work with trusted partners who have delivered for you before. That might cost a little bit more money and that might be slower approach, but then you also want to explore and experiment and see if you can't do it with new partners leveraging new capabilities for lower cost. That has changed over the years. With the commercial orbital transportation services, Cargo and crew, that is the contracts that brought SpaceX online. The incumbents have really been struggling. I mean, they have failed to deliver. And I think the Boeing Starliner, when they finally launched astronauts, you know, years behind schedule to the space station last year and then their Starliner vehicle was deemed unfit to bring those astronauts back. I think that was a very symbolic, monumental shift, you know, pointing to the future of what's going on in the space economy. That the incumbents have really struggled to keep up with the pace of innovation. I think that, that, that Congress and the US Government are not interested in, in spending a lot of money for capability that continues to just be like over budget and behind schedule. I think there's going to be a big re architecting and rethinking of these big programs like Artemis. I think that, you know, there's already been conversation from Trump and Elon both talking about, you know, do we want to go to the moon or do we want to go straight to Mars? And I think that. Right, you know, that's on the chopping block for sure.

Maria Varmazas (14:59)

It'll be very interesting to see what ends up happening there. Certainly I want to just completely shift to thinking a bit more about space sustainability. This is an area where, you know, we've been tracking a lot with the private sector and just so many companies working in Space sustainability. One of the points that you made, and please correct me if I'm summarizing this poorly, is that we're going to see the commercial sector step up even more to the point that maybe tracks in the Commerce Department may be deprecated. I don't want to put words in your mouth if I'm saying that incorrectly. I just want to hear more of your thoughts on where you think that might be going.

Chad Anderson (15:32)

Yeah, it's. Look, there's. If you look at the number of satellites that have been launched into orbit, it is over time. It is a straight line up in 2024. The growth is exponential. Whereas just a few years ago, there were relatively small number of satellites in orbit. You know, you could really sort of manage things using Excel spreadsheets and emails and Slack notifications, and that's how it was happening. And today there's just too much activity, too much going on. You know, I don't know what the estimates of Starlink maneuvers or something like 50 to 100,000 maneuvers a year or something. They're constantly, continuously moving around to dodge debris and, and maintain safe orbits. So this is no longer an elective thing. This is essential space capital. We've been investing in companies focusing on like, well, first of all, where are things in orbit? Let's understand where things are first, and then let's try and coordinate between each other, between companies and between countries to make sure that we maintain safe operating orbits. There was a government initiative, you know, the TRACKS program was. Commerce Department was going to help fund this capability and provide this data to the market. Turns out that the market has, has blown right past them that, like that capability is now commercially available. And so there's not really a need for tracks, a need for a government program to fund this thing because private companies have already built it and it's out there and you can just buy it off the shelf.

Maria Varmazas (17:12)

Yeah, that makes a lot of sense. I have to ask. I mean, so your list here, very comprehensive. I'm wondering if there's anything that didn't make it in.

Chad Anderson (17:21)

Well, I think the interesting thing that didn't actually make the list because we were talking more about innovation and technology and markets, but on the investment side. Right. So we saw, everyone knows we had the big run up in 2021 when capital was cheap in the zero interest rate period. And then over the last few years, things have been really tough. Fundraising has been difficult. So a lot of startups, you know, have run out of cash. There's been a very sort of healthy tightening of belts. Some companies haven't made it. And you can see the date, you know, you can see that in the data, the investment has fallen from 2021 to 2022 and 2023. It appears that 2023 was the bottom year over year. The data shows that we're now up 30% in 2024 than we were in 2023. So that's very positive sign. We think that that trend is going to continue. We think we're going to see a lot of activity in 2025 in the capital markets. And this is all really without SpaceX propping it up. SpaceX has, has raised a lot of capital over the last decade and they haven't had to tap the capital market since 2022 because their business is going so well that they're funding their growth with revenue. So what that means is that other companies are now coming in, raising capital and building solutions on the coattails of SpaceX and this increased access to orbit. So that's another. I put that as prediction number 11.

Maria Varmazas (18:53)

That number 11.

Chad Anderson (18:54)

There you go. That growth. Yeah. In 2025.

Maria Varmazas (18:57)

Love that. Thank you, I appreciate that. I have to ask, so taking SpaceX out of the conversation, as you said, it is such a strong outlier because it does just skew everything. I'm curious if there are companies that you are concerned about keeping an eye out in. An eye out for. In a. Oh, kind of way, and companies that you are really excited about keeping an eye on for really strong growth.

Chad Anderson (19:20)

Yeah, so we've seen a lot of companies that haven't made it. So companies that, you know, maybe didn't have great business plans or great unit economics, sometimes it cost more than it, you know, to build the thing, than it caught, than people were willing to pay for it. Those companies have, by and large, mostly have gone away. You know, the tide has come in and the tide has gone out. But there are a few that we're going to see in 2025, some big ones, I think. You know, these are the companies that raised a lot of capital in 2021 that have not had to go back out to the capital markets to raise again. Which means that you haven't had, you haven't seen their, their valuations decrease. So, you know, let's say a launch company went out, raised $1 billion at a 4 1/2 billion dollar valuation and have not, you know, they're still pre product. They don't have any, you know, they're not launching anything. Can they justify a $4 billion valuation in this Market, probably not, but, but they raised so much capital that they've been able to survive for the last few years. And so the rubber is going to meet the road there on a few big, big high profile companies and we're going to see, you know, so there's still some more pain that we're going to see in 2025. Probably one that's worth keeping an eye on. So we talked about space traffic management and you know, you should keep an eye on LEO Labs and Khan Space. Both of those companies are doing really great work on domain awareness and coordination. But given what's going on in LA with the wildfires, I think I got to mention Muon Space. So this is the best satellite team in the world. They, a lot of them come from Skybox Imaging. They built Methane Sat, the, the methane detecting satellite for the Environmental Defense Fund that launched last year. And they're now working on firesat, which is going to be built by Muon. It is a constellation of satellites that is going to be able to detect wildfires the size of a classroom within 15 minutes anywhere on the planet. That means that you will know what's happening with enough time to actually take action and do something to prevent its spread before it gets out of hand. And this is an initiative that's funded by google.org and they're leaning in and providing a lot of their AI capabilities to help here. The Moore Foundation Environmental Defense Fund. And that's just one initiative that Muon's working on and they're doing a bunch of other really interesting things too. But that is incredibly important. As you've seen, a lot of the data that's telling us and giving us updates as to what's going on in LA is coming from satellites and step change in capabilities coming online very soon.

Maria Varmazas (22:29)

We'll be right back.

Dave (22:36)

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Maria Varmazas (23:55)

Welcome back and a shout out today to NASA astronaut Don Pettit, who has definitely become one of the legends of astrophotography. His vantage point on the ISS is enviable for those that love to photograph the stars. And when you are in space, looking out at Earth and the great cosmos beyond, you might be tempted to think truly, what else is left to photograph? How many versions of the great blue marble against inky blackness can one appreciate? And Pettit is showing us all that there is still so much more for us to see through his lens. He transports us to his incredible vantage in leo, and he recently shared this just amazing long exposure photograph that he took from the iss with the Earth below surrounded by a radiant blue, orange, white and even red in the atmosphere, a heavy blanket of stars in the Milky Way above, and even some streaks from Starlink satellites passing in the distance. They should have sent a poet, right? Well, this time they sent an amazing photographer with a strong artistic eye and the result is visual poetry. We'll link this stunning shot for you in our show notes. Definitely do not miss this one. If you are interested in hearing more detail about the art and science of astrophotography aboard the ISS, the chat between Don Pettit and NSF's Jack Beyer is not to be missed. We ran that chat here on T Minus in late December. You may have missed it because of the holidays, but we'll link that for you as well. In case you haven't heard it yet.

Chad Anderson (25:22)

Foreign.

Maria Varmazas (25:30)

That'S it for T minus for January 15, 2025, brought to you by N2K Cyberwire. For additional resources from today's report, check out our show notes@spare.n2k.com we'd love to know what you think of this podcast. You can email us@space2k.com or submit the survey in the show Notes. Your feedback ensures we deliver the information that keeps you a step ahead in the rapidly changing space industry. N2K strategic workforce intelligence optimizes the value of your biggest investment your people. We make you smarter about your team while making your team smarter. This episode was produced by Als Carruth. Our associate producer is Liz Stokes. We're mixed by Elliot Peltzman and Trey Hester with original music by Elliot Peltzman, our executive producer is Jennifer Ibin. Our executive editor is Brandon Karpf. Simone Petrella is our president. Peter Kilby is our publisher. And I am your host, Maria Varmazes. Thanks for listening. We will see you tomorrow.

Dave (26:44)

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