For five minutes, at 7.34pm and again at 9.11pm on Saturday 7 December 2023, the International Space Station (ISS) rocketed overhead at an altitude of around 402 kilometres above Earth like an errant star. On board were seven astronauts from the United States, Europe, Japan and Russia who will man the craft until March 2024 and relay valuable information back to Earth.

As iconic as the ISS is, it has over 12,000 actively tracked (yet less impressive) objects for company in local space, according to the UN’s Outer Space Objects Index. In fact, there were over 183 orbital launches in 2023 including rockets and other systems capable of placing payloads into or beyond Earth’s orbit.

Given the amount of space tech orbiting the Earth, it is no wonder the global space economy grew to $546-billion in 2023 according to The Space Report released annually by The Space Foundation. Of this, the commercial market accounted for some $427.6-billion, which itself grew by 8% from the previous year. And five years from now, it is anticipated that the space economy will hit the $800-billion mark, and $1-trillion not long thereafter.

Even more astonishing is that the private sector constitutes some 78% of the total space economy. Consider that of the 49 rocket launches undertaken in the United States in 2023 (which launched the most rockets by country, followed by China at 25), 44 were performed by SpaceX. 

While rocket launches are newsworthy events commanding significant budgets, the rockets themselves are generally considered as the workhorses whose mission it is to transport and deploy satellites into low earth orbit (LEO) and beyond. For their part, satellites carry the payloads — those elements of the spacecraft specifically dedicated to producing mission data and relaying this back to Earth. 

These are the obvious, visible parts of the space economy. Yet, space technologies are embedded in a remarkable number of everyday products and services that would not function effectively without them: from parcel tracking or e-hailing to mobile communications and money transfers as well as international flights and weather forecasts. 

On a grander scale, these technologies help us understand, plan and mitigate risks associated with climate change, agriculture, natural and built environments as well as communities and population patterns, through the relay of exceptionally detailed information about our planet.

Growth takeoff

The European Space Agency explains that the space sector is not only itself a growth sector, but a “vital enabler of growth” in numerous sectors. Chad Anderson, of US-based VC firm Space Capital, calls space-based technologies such as satellite communications, geospatial intelligence and GPS the “invisible backbone” of the space sector.

It stands to reason then that venture capital flows into the sector reached $11.6-billion in 2023 across 289 companies according to Space Capital. Space manufacturing attracted the most early-stage funding, followed by small satellite manufacturing, small launch and geospatial intelligence. The US, China, Singapore, France and India dominated space equity investment in 2023. 

Africa is mirroring this potential, albeit on a much smaller scale. Most African space ecosystems are in a very nascent stage, with a total market value for 2023 of just under $20-billion — about 0.5% of the global market. 

Despite this currently small global contribution, 13 countries have launched satellites (via foreign launchpads), with Egypt and South Africa already having led the first wave in the late 1990s, followed by Nigeria, Morocco and Algeria in the early 2000s. More recently, a number of countries have launched smaller CubeSats as part of a process to develop the in-country knowledge to participate in the broader market.

Investment challenges

Earlier this year, Stellenbosch-based start-up Dragonfly Aerospace sent their first imaging satellite onboard SpaceX’s Transporter-6 rocket, making it the world’s first agriculture-focused satellite constellation. The company, established in 2019, produces compact high-performance satellite imagers and payloads for CubeSats, small satellites, and microsatellite Earth observation satellites. Dragonfly Aerospace’s production facilities aim to produce up to 48 satellites (200 kg) annually.

Read more in Daily Maverick: South African-made satellite in orbit to aid sustainable agriculture

India, one of South Africa’s BRICS partners, is also a young space nation, but it has a robust space start-up ecosystem and good investor appetite. Aviation Week reported that India’s space start-ups raised more than $112-million in 2022; while as of August this year, a total of $63-million was raised. The country has just two to three per cent of the global space industry, but hopes to grow this to 10% by 2030 through a focus on space manufacturing and satellite launches. 

Africa’s ability to replicate India’s success is hampered by a number of challenges. These include: 

• Limited investment awareness of the sector and local innovation;
• A lack of diverse funding options and access to risk-adjusted capital to support the growth of the industry;
• The need for more overt in-country and intra-regional sector linkages;
• Stronger regulatory frameworks; and
• Skills transfer models.

Despite these challenges, these are fertile grounds. Existing investor appetite for Africa’s start-up scene has produced viable VC-backed companies from other sectors. A cluster of start-ups have already successfully grown and continue to serve millions of people across the continent and beyond. These include AI-focused InstaDeep, FlutterWave and Onafrique spanning the fintech and agritech-based Aerobotics. 

Recently, startups with a deep reliance on space-based technologies raised significant early-stage rounds like Amini in Kenya (providing climate data across Africa) at $4-million, and Gometro in South Africa (providing positioning and transport services) raising $9-million.

The number of VCs operating in the continent has also increased, along with the establishment of large pan-African or regional funds. These include Partech ($263-million), Norssken VC ($205-million), Founder’s Factory Africa ($114-million), Goodwell’s uMunthu II fund ($61-million) and Anza Capital ($50-million).

On top of this, initiatives to build continental capacity aimed specifically at African space-tech start-ups are creating a pipeline of talent and enabling a crucial touchpoint for investors, industry specialists and start-ups. 

One such example is the Africa Earth Observation Challenge which is a pan-African space tech start-up challenge that has worked with over 330 start-ups from 30 African countries since 2016. 

Partners include five African space agencies, multinational space companies from Planet Labs, Maxar, ESRI and AWS to multi-lateral organisations like RCMRD and Digital Earth Africa. These players are also supported by specialist researchers like The Research Institute for Innovation and Sustainability (RIIS), IP law firms, incubators, accelerators and venture capital funds.

Given the nascent state of our space ecosystem, by definition, we can only create a new industry by empowering entrepreneurs to build that industry. Getting this right requires an awareness of space-based innovation that is already happening here, combined with long-term thinking and deliberate development of the continent’s space innovation ecosystem. DM