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NEW YORK — Investors are preparing for the incoming Trump administration to expand the defense budgets driving the space industry’s growth.
“I think that it’s going to bring more investment into the space market,” Mark Boggett, CEO and managing partner at British early-stage space investor Seraphim, said Nov. 20 during the Deutsche Bank Global Space Summit here.
According to Boggett, Donald Trump’s recent re-election provides “more clarity around budgets and long-term budgets that are going to contribute to space-related companies.”
He also noted how the previous Trump administration had pressured NATO allies to increase their contributions to the intergovernmental military alliance.
European countries were largely on their way to committing “a couple of percent of GDP” more to NATO, he said, “but I now think we’re in an environment where that’s not enough. They’re going to have to double down again.”
Accelerated efforts to reduce bureaucracy at the Federal Communications Commission and Federal Aviation Administration should also help facilitate deal-making, said Tony Kim, managing director of fundamental equity at U.S.-based Blackrock, the world’s biggest asset management firm.
“Some companies maybe will benefit more than others,” Kim said, “the closer you are to the administration the more likely that you will benefit.”
Kim did not outright name SpaceX CEO Elon Musk, one of president-elect Donald Trump’s most vocal supporters, who leveraged his social network site X alongside sizable financial donations to help him reclaim the White House.
Carl Sjolund, a partner at Swedish private equity firm EQT, had a more tempered view on a potential uptick in space investments in the upcoming Trump administration.
“I don’t know if that changes things that dramatically,” he said, pointing to how defense investments were already soaring amid rising geopolitical tensions following Russia’s war in Ukraine.
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Sjolund also highlighted Europe’s multi-billion-dollar support for a sovereign broadband constellation, adding that he expects the European Union and European Space Agency to continue investing in the space sector.
Multiple European efforts in recent years to help address a shortfall in space capital relative to the United States have had some success, Boggett said, but they have tended to focus on early-stage companies.
“There’s still a big gap in Europe in relation to later-stage investment,” he said, “and that’s not something that I see governments are on the horizon to really do much about.”
According to Boggett, European companies that have successfully made it through early funding rounds are therefore destined to become targets for American investors.
“That’s going to really accelerate as a consequence of the change of leadership in the U.S.,” he said, “and I think M&A is really going to start to become more prevalent.”
Meanwhile, Seraphim analysis shows China has invested more money in space than the U.S. in the year to date.
“It’s the first time that has happened in the sector,” Boggett said, underlining the growing competition the West faces in the increasingly contested space domain.