Written by Kush Thakrar
2020 was a historic year in a number of ways. The world was hit by a deleterious pandemic, the U.S. elections acutely divided the country, and Britain finalised its divorce from the European Union. 2020 also witnessed notable advancements in the commercial world: the stock market (in the U.S. especially) grew incommensurate to the economy, SPACs became a popular means of going public, and health-tech created many new billionaires to add to the world’s richest. Among all of this, however, was a climacteric development that flew largely under the radar: the rise of commercial space flight.
Despite the difficulties endured by many companies during this pandemic, the space industry continued to gather momentum. It currently boasts a market worth of $400 billion, and set a new record in receiving investment by the fourth quarter of 2020. Indeed, many experts had speculated that there would be a wave of bankruptcies – this is, after all, one of the most capital intensive sectors out there – but investors continued to pile money in.
This is best evidenced in how 2020 experienced an uproar of early-stage capital towards small satellite companies. As many are able to lower transportation costs, their ‘application’ businesses can become exceedingly profitable. This is where the main surge in the space economy comes from, and where future stimulus will be directed: companies like Spire and Capella Space raised millions from venture capitalists, and Elon Musk’s Starlink is preparing an IPO as soon as it attains a more predictable cash flow. Satellite-provided services, therefore, are likely to hold a lot of business potential going forward.
Space tourism is also approaching feasibility, as Virgin Galactic recently averred that it had the requisite capital to begin sending flights to the edge of space. This was another company that benefitted from the stock market boom of 2020, and although many institutional investors feared it was overblown, it cashed in on a lot of popularity among retail. Even SpaceX, whose mission is not space tourism, is getting ready to send private citizens to the International Space Station. It is important to note this because satellite services may be seen as the veritable embodiment of the ‘space economy’, but this is a multi-dimensional sector. As rocket reusability technology continues to develop apace, and space companies are able to vertically integrate their operations, sending ordinary people to the threshold between space and orbit will become an increasingly popular business.
The trends that reflect investor optimism in the space economy are akin to those driving NASDAQ: namely, the precipitous growth of broadcast media, telecommunications, commerce and the internet as a whole. This all works in conjunction with optimised technologies that can permit the navigation of such a complex and inevitably expensive area.
It is no surprise, therefore, that law firms are taking a keen interest in these developments. Some, like Bird & Bird, have even established departments specifically tailored to the space industry. Evidently, there is a lot of scope for legal work in this burgeoning sector. For example, as satellite firms seek to (repeatedly) raise capital, they will require succour from capital markets lawyers. As they develop technologies to reinforce their capabilities, they will need assistance from IP lawyers. As they vertically, or sometimes even horizontally integrate, they will seek out corporate lawyers. In the event of liability issues – particularly for space tourism firms – they will need litigators to defend them. In times of disruption, there is inevitably work for all types of lawyers. Whilst there may be turmoil on Earth, space seems a bright spot.
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