FutureAerospace’s China Commercial Space Investment Report 2018: Highlights

2018 has been a crazy year for Chinese commercial space, and 2019 promises to be even crazier. iSpace raised 110 million RMB on January 3 [1], Minospace raised an estimated 20 million RMB on January 15 [2] , and as I am writing these lines (26/01/2019), Changguang Satellite (CGSTL) just raised a whooping 250 million RMB in an angel round [3]. This has literally smashed January 2018’s record (283 million RMB raised). Before 2019 goes any further, let’s take some time to reflect on investments in Chinese space tech in 2018.

FutureAerospace (未来宇航 in Chinese) [4], based in Beijing, is one of the leading Chinese space think-tanks. It published a week ago its China Commercial Space Investment Report 2018 (中国商业航天产业投融资报告), which brings fantastic insights on the growth of local space tech. Although available only in Chinese, I have commented and translated in English the main highlights, below.

1) Amounts raised, number of rounds: a boom in investments

In 2018, over 70 VC companies invested in 30+ Chinese space start-ups, raising a total of 2.1 billion RMB – approximately 310 million USD -, in 34 rounds. not counting money raised by listed companies (in which case the figures would reach 3.571 billion RMB/ 530 million USD). Among these rounds, 12 of them were above 100 million RMB (15 million USD).

graph 1 bisbis - number of rounds per category
*Fund raisings include those by listed companies (one in February and one in May)

2) Number of Rounds by Category (Seed, Angel, A, B, C series…): a lot of very early stage start-ups, while some are reaching a mature stage

Half of these rounds were for very early stage start-ups (2 seed rounds, 12 angel rounds, 3 Pre-A rounds), while the other half consisted in start-ups which have reached a certain level of maturity (6 A series, 4 A+ series, 4 B series, 1 B+ series, 2 C series). Expectedly, the funds raised by the second group of start-ups are overwhelmingly higher than the former.

graph 2 bis - number of rounds per category

3) Analysis by type of application: investors are going for satellite applications & turning away from launchers

These different rounds were then divided into 4 categories: rockets, satellite manufacturing, satellite operations, and satellite applications. The following graph is very revealing in the current investment trends:

  • Almost all of the more advanced rounds (A+, B, B+) are targeted towards launchers. Indeed the Chinese NewSpace race started out at the turn of 2014-2015, which saw the setting-up of many highly publicised rocket start-ups such as One Space, Landspace, Linkspace, and iSpace. After 2-4 years of development, these start-ups have matured, conducted suborbital launches in 2018, and a couple are planning for orbital launches in 2019 [5].
  • The investment window for launchers in closing, and VCs are turning towards less crowded areas such satellite applications (cloud, data-crunching, …) and satellite manufacturing. Investment into rocket start-ups only accounted for 9% of these earlier stage investments (seed, angel, Pre-A and A rounds). These trends were already predicted and explained by some Chinese VCs investing in space tech.

graph 3 bis - investment by round and type of application

4) Geographic distribution of investments: Beijing, the capital of Chinese NewSpace

Predictably, almost all of the funds were raised in Beijing, China’s capital of NewSpace. A Previous study by China Aerospace Blog based on 40 Chinese space start-ups showed that 70% of all NewSpace start-ups in China were headquartered in Beijing. FutureAerospace’s 2018 report shows that among the 34 rounds of fundraising (excluding listed companies), 28 were done in Beijing, – 82% -. In value, the Chinese capital’s domination is even clearer: 2.089 billion USD, 89% of all countrywide investments.

graph 4 bis - geographic distribution

5) Remarkable start-ups of 2018

Among some of the more remarkable start-ups in 2018 were:

  • Landspace: rocket manufacturer founded in 2015 in Beijing. Currently designing a small solid-fuel rocket Zhuque-1 and a larger methalox medium lift Zhuque-2 (4000 kg to LEO). In 2018, Landspace raised 500 billion RMB in 2 rounds (B and B+), from  VC companies including China Growth Capital and Goldwind.
  • One Space: also founded in 2015 in Beijing, OneSpace is working on the OS-M solid light rockets. The company similarly raised 500 million RMB in 2018 in 2 rounds, raising the company’s estimated value to 800 million RMB. Among the backers of One Space are China Merchants Capital.
  • iSpace: iSpace China (not to be confused with iSpace, another space start-up in Japan), was founded in 2016. Similar to Landspace, iSpace is also developing a solid small rocket (300 kg to LEO) and a larger, reuseable methalox medium-size rocket. It launched two suborbital rockets in 2018, Hyperbola 1S and 1Z. The first orbital flight is planned in the first half of 2019. Among VC companies investing in iSpace are CDH Investments and Matrix Capital China.
  • Galaxy Space: founded in 2016 in Beijing, Galaxy Space is a communications micro-satellite manufacturer. It raised 100 million RMB in an A+ round in 2018 [6]. Investors include prestigious VCs like Shunwei Capital and IDG Capital China.
  • Commsat: based in Beijing and founded in 2015, Commsat is a satellite subsystem manufacturer, which has delivered multiple modules already for Chinese micro-satellites launched in 2017 and 2018. It raised over 200 million RMB in two rounds (A and A+) in 2018. Investors include Junzi Capital and SkyChee Ventures [7].
  • Mino Space: Mino Space is a micro-satellite manufacturer founded in 2017 in Beijing. It has already built several micro-satellites such as Weilai-1, launched in october 2018 on a Landspace rocket (which failed).

References:

[1] https://www.chinamoneynetwork.com/2019/01/03/cdh-invests-series-a-round-in-chinas-private-aerospace-company-ispace

[2] https://36kr.com/p/5172188.html

[3] https://36kr.com/p/5174039.html

[4] http://www.futureaerospace.com/

[5] https://spacenews.com/chinese-companies-onespace-and-ispace-are-preparing-for-first-orbital-launches/

[6] https://www.crunchbase.com/organization/galaxy-space#section-funding-rounds

[7] https://www.crunchbase.com/organization/commsat#section-investors

 

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