IQT's Space Origins

The commercial space industry underwent a revolution. Space, a domain once limited to superpower nations, has transformed into a platform for innovation to be leveraged by the best and brightest around the world. Over 10 years ago startup companies began raising private capital for deployment of satellite constellations in low earth orbit (LEO). As these early venture capital (VC)-backed startups matured, it paved the way for a wide variety of new technologies, business models, and operational concepts. While significant uncertainty remains for the future of the space sector, the dramatic changes that have occurred over the past decade have forever changed the space technology landscape.

In-Q-Tel (IQT) first invested in space-related companies in the mid-2000s. These early investments were in satellite communication technologies, as "SatCom" once dominated commercial space. While IQT first noticed the shift in VC-backed space companies in 2009, it wasn't until 2013 that IQT placed its first bet in this new, burgeoning ecosystem. This initial investment led to a Space Market Survey that kicked off a multi-year focus on space investments. To guide IQT's space investment strategy, we created our first commercial space framework. The first framework, shown below, had a constellation focus, because LEO constellation operators initially dominated the VC-backed space landscape. As the VC-backed space ecosystem evolved, so has IQT's space technology framework.

The Current Landscape

The space sector continues to grow in complexity with the rise in private space investment, the proliferation of economically focused space agencies internationally, and the growing diversity of space system operators. Much of this change was driven by the rise of small satellites, which led to new remote sensing and communication capabilities, and emerging today are new market segments, such as on-orbit servicing.

As these changes transform the space domain, opportunities emerge to leverage commercial space capabilities in new ways, to augment existing technologies, to add resilience to space architectures, and to enable acquisition of some capabilities at lower costs. Also emerging are new challenges, such as securing hybrid space architectures, keeping pace with a dynamic space environment, and adapting to the growing public nature of and transparency enabled by, space activities. These challenges require a rethink to legacy approaches and standard practices to successfully adapt to the new normal in space. 

IQT's Space Framework

IQT continues to use a space technology investment framework to set and track our investment activity against the larger space ecosystem, updating the framework as the ecosystem evolves. The latest iteration of that framework is depicted below.

The core of the framework (light blue boxes) convey the reasons for going into space in the first place. This framework emphasizes connectivity and Earth sensing due to the interests of IQT's government partners and the prevalence of commercial activities in these areas. There are other reasons for going to space that IQT continues to track. The royal blue boxes highlighting "In Space Support" and "Ground Support and Data Archive" represent support services that can clearly be delineated as occurring on either the space segment or the ground segment. As the space ecosystem evolves, it is becoming more challenging to clearly delineate the space and ground segments as more and more functions can be achieved in either segment. The dark blue boxes on the left and right side represent cross-cutting functions where the line between ground and space segments has already blurred. Finally, the gray box along the bottom represents technology enablers that can have impacts throughout the framework.

Looking to the Future

The space sector will continue to evolve as companies mature and new markets develop. While the space sector has had some false starts in decades past, in the development of new commercial markets, that should not be used as an excuse to dismiss the changes in the commercial space sector that have already occurred and will continue to do so. Company failures and market consolidation will undoubtedly occur, but such events are normal in any innovation ecosystem, and not necessarily a sign of another false start. It is important that any strategy to leverage the commercial space sector consider such dynamics, by avoiding dependence on any one company.

Overall, IQT believes these trends in commercial space present great opportunities for national security and beyond to leverage these new products and services to augment their data sources, lower their operating costs, and, perhaps, provide new capabilities that have not yet been realized. IQT remains ready and able to help navigate this dynamic and exciting commercial space ecosystem.