Photo/Shetuwang

Jan. 14 (NBD) -- More than 1,000 small satellites are likely needed to be launched in the next five years, said Feng Xu, senior investment manager at Hit Robot Investment Management (Shenzhen) Co., Ltd. ("Hit Robot").

Data shows 345 satellites were launched in 2017, of which 90 percent, or 310, were below 500kg. With the ascending demand for small satellites, the year 2019 will witness sizable growth in mini-rocket launches, Feng commented. Large rockets enjoy an edge in costs, but small and mini rockets deliver a higher level of flexibility in launching mode. The two types of rockets are complementary and will co-exist in the future, he stated. 

According to The Space Report 2018 released by the Space Foundation, the global space economy reached 383.5 billion U.S. dollars in 2017, an increase from 329 billion U.S. dollars in the previous year. Totaling 307.3 billion U.S. dollars, commercial operations made up 80.1 percent of the global space economy of the year.

The bright prospect of commercial space sectors has lured a number of venture capitalists, including Matrix Partners, China Growth Capital, Gaorong Capital, IDG, Shunwei Capital, and Essential Capital. 

Data from Hit Robot showed a total of 19 Chinese space companies raised more than 2.3 billion yuan (340.4 million U.S. dollars) accumulatively from investors last year. Nine from the satellite launching service sector attained investment of more than 1.7 billion yuan (251.6 million U.S. dollars), 8 from the satellite constellation operation field gained over 400 million yuan (59.2 million U.S. dollars), and 2 from the satellite manufacturing area got more than 200 million yuan (29.6 million U.S. dollars).

Commercial space, especially commercial rocket launches, is a sector that shows great potentials and is appealing to investors, remarked Gong Yuan, director of the frontier technology team at China Growth Capital, an early stage tech venture capital firm based in Beijing. 

Private firms, with flowing-in capital, are expected to play a bigger part in the Chinese commercial space sector, as the country is deepening civil-military integration and encouraging new players to enter the industry that was once off-limits to private companies, said one industry insider. 

Some Chinese private firms have sent rockets to space since 2017, with a majority conducted last year. For example, Beijing-based private company Space Honor (also known as i-Space) sent a single-stage solid-propellant rocket to an altitude of 108 kilometers on April 5, 2018. Another Beijing-based private space launch group, OneSpace, successfully launched its second suborbital rocket from a site in the Gobi Desert on September 7, 2018. 

For space startups, the top priority is not to pursue risky high-tech technologies, but to make the most out of existing mature technologies and engineering expertise to produce and commercialize highly-reliable, low-cost products while improving the supply chain and services, noted Wang Xinhe, partner of Essential Capital. 

However, regarding the commercialization of commercial space companies, one researcher showed a prudent attitude, saying to NBD that with the increase of rocket launches, reducing costs and increasing revenue will be a huge challenge to commercial space companies. 

At present, among Chinese private space firms, only LandSpace and OneSpace are building their own research and manufacturing facilities, so as to shorten the supply chain and reduce procurement costs. 

Apart from cost challenges, Chinese firms will face pressure from their foreign counterparts in the nascent industry. 

In November 2018, Argentine satellite company Satellogic announced the plan to set up an office in China, and then will establish a company in the country. This broke the traditional model that foreign commercial space companies must have an agent for the access to the Chinese market.

Email: lansuying@nbd.com.cn