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<\/a><\/p>\nBy Akash Sriram and Tanya Jain<\/p>\n
(Reuters) -Investments in the U.S. space industry dropped 53% to $2.2 billion in the three months ending March, a report said, with high interest rates and challenging market conditions making it the lowest-funded quarter the sector has seen since 2015. <\/p>\n
The steep drop in fresh capital has left many companies in a vulnerable state, while the failure of Silicon Valley Bank, a leading provider of venture debt, has added to the challenge, a report by venture capital (VC) firm Space Capital said on Thursday. <\/p>\n
Space Capital’s report, coming on the heels of a Chapter 11 filing from Richard Branson’s Virgin Orbit Holdings Inc, tracked 89 companies active in the sector.<\/p>\n
“Of the 100+ launch companies that collectively raised $27 billion over the last decade, there are currently only two that are operational: SpaceX and Rocket Lab,” the report said, adding that there was a visible “dichotomy between the winners and everyone else” in the rocket manufacturing sector.<\/p>\n
The risk threshold to invest in space companies was much higher earlier, but given recent market uncertainty, investors may not be as risk-loving and space being a nascent sector, many are dialing back, Deutsche Bank analyst Edison Yu told Reuters separately. <\/p>\n
However, Space Capital added that companies in emerging industries, like those associated with the National Aeronautics and Space Administration’s Artemis mission to the Moon are seeing an increased interest.<\/p>\n
“From the public institutional investment side, there is not really much interest in the lunar economy…… that said, personally based on my conversations with companies, I believe there is actually a lot of potential in the lunar economy,” Yu said.<\/p>\n
(Reporting by Akash Sriram and Tanya Jain in Bengaluru; Editing by Nivedita Bhattacharjee)<\/p>\n
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