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The Final Frontier For Profit

Before the last decade, the commercialisation of space seemed like science fiction. But plummeting costs have created new opportunities. Let’s launch into what has some investors thinking, ‘Houston, we have a profit’.

Since humankind first moved into orbit, economic gains have followed. Cameras small enough to fit in a mobile phone. Scratch resistant lenses. Wireless headphones. These are just a few pieces of technology developed by NASA and later commercialised by the private sector.

But over the last decade we’ve entered a new Space Age: a shift from government-driven innovation to private. Consequently, the avenues of economic growth have expanded from indirect gains through innovation to direct revenue generation. No wonder the global space economy has been valued at US$469b (2021), and Citigroup (NYSE: C) forecasts total annual revenue to reach US$1t by 2040.

Small steps to giant leaps

As private space expansion advances, the stepping stone has been data and services from private satellites. Two listed examples exploring that: Kleos Space (ASX: KSS) and BlackSky Technology (NYSE: BKSY).

Kleos Space is a Luxembourg-based, ASX-listed nanosatellite developer, manager and data provider (see Under the Spotlight AUS: Kleos Space SA (KSS) for more). Kleos started generating revenue in 2H22 by selling access to the data produced by the three clusters of four nanosatellites it has in orbit.

Meanwhile, BlackSky Technology combines satellite imagery with an AI-enabled analytics platform. Customers can monitor and analyse a number of ‘strategic sites’ via the company’s archive and real-time feeds. This service generated BlackSky US$34m in revenue during 2021 – up 61% year-on-year.

The next stage of space commercialisation is probably what you first thought of: tourism. Big money, big egos and lots of media attention there. One of the key players, Virgin Galactic (NYSE: SPCE), is expected to launch this service in Q2 2023.

Without even getting into the US$100t potential behind asteroid mining or, one day, actual interplanetary colonisation, it’s fair to say that space really is the final frontier for profit.