After a period of painful valuation correction and a ‘winter’ in venture capital funding in 2022, the global space sector has not only recovered, but entered 2025 at a historic high. According to the latest data from investment firm Seraphim Space, the market, unlike the broader startup ecosystem, saw a 48 per cent jump in private investment last year to $12.4 billion. Analysts have no doubt that 2026 will see a continuation of this trend, although the fundamental drivers of growth have changed.
The key driver of capital flows has ceased to be futuristic visions of orbital tourism and has become hard national security. Space infrastructure has acquired the status of a critical strategic asset. This is evident in the geographic composition of funding, with the US dominating the market, attracting $7.3 billion, which accounted for around 60 per cent of the global pool. This is a direct result of the increasing collaboration between Silicon Valley and the Pentagon. Programmes such as the Golden Dome initiative and the executive order signed by President Donald Trump in December, recognising space as an economic security priority, send a clear signal to investors that government contracts will stabilise the revenues of private companies.
While Europe is recording only moderate increases, a race against time is underway in the East. China, pumping some $2 billion into the sector, is aggressively expanding its own launch capabilities and satellite production, which only fuels the competition for geopolitical dominance and stimulates further spending in the West.
Parallel to the arms race, the imagination of investors is fired by the prospect of a SpaceX IPO. Lucas Bishop of Seraphim Space points out that a potential IPO of Elon Musk’s company would act as a powerful catalyst for the entire industry. A successful SpaceX IPO would ultimately validate SpaceTech as a mature mainstream asset class, paving the way for an exit for a growing cohort of late-stage companies. Combined with the progressive integration of artificial intelligence with satellite data analytics, this lays the foundations for a long-term bull market that is poised to accelerate further in 2026.
