Maturing Space Industry Might Draw Private Equity Attention: Consultant

Private equity hasn't been particularly active in investing in space in part because firms still see the sector as an emerging market in an uncertain regulatory environment with long development cycles, Emerald Advisors' Jan Grondrup wrote Thursday. While venture capital focuses on high-risk, high-reward opportunities, private equity firms "often seek businesses with predictable cash flows and clear paths to profitability," he said. Many space companies -- especially startups -- have limited recurring revenue and are in capital-intensive development phases, he said. As more space companies mature into sustainable businesses with strong revenue potential, "the risk-reward equation may become more attractive." Space increasingly being tied into terrestrial telecommunications networks could also lead private equity firms to rethink their digital infrastructure investment strategies, he said.