Investment opportunities in space spin-offs
At ESA's Investment Forum earlier this month, 36 entrepreneurial companies from 13 European countries met with 28 venture capital professionals looking for prosperous investment opportunities.
The space industry holds an almost infinite amount of technologies that can be transformed into start-up businesses in the non-space sector. With ESA's Investment Forum, ESA's Technology Transfer Programme Office (TTPO) wants to show investors that space technology originally funded by the space programmes can become profitable applications in the non-space world.
In recent years, transfers to commercial applications have generated countless non-space business opportunities. The leading example is that of satellite-based services, today one of the most promising business sectors.
Is it the right time to invest?
The current economic crisis can also be seen as an opportunity, as George Noël, Director of European Venture Capital Association, explains.
"If we look at the space-related investments that were made in 2008, we see that there were 24 investments placed, for a total of €130 million in equity value. One of them was iOpener we did with ESA. This is a nice example of a spin-off fostered by ESA which found a venture capital investor in Germany."
The Dutch-German iOpener is a successful business backed by ESA's TTPO Business Incubator in the Netherlands, where it was hosted in its initial start-up phase in 2007.
The company received €4.1 million in venture capital in January 2007 for start-up operations.
iOpener developed a technology that maps real competitions, such as Formula 1, to an artificial world, allowing gamers to participate in the race both virtually and in real time, competing with the real drivers and other players.
Noël also emphasised that, venture capital investment in Europe has showed some very good results, with a high return on investments. "Since 2001," says Noël, "we've seen a complete conversion of the performance of the venture capital funds, with Europe slightly outperforming its US counterparts."
Why invest in space technology spin-offs?
"Innovation is the key to the future, and knowledge is our capital. Technology transfer from aerospace can give Europe's research and technology development a major boost. Especially now, in times of global economic crisis, industry should take advantage of the knowledge and technology that already exists in Europe," says Frank M. Salzgeber, Head of the ESA's TTPO.
"It is important to have a vision and to evaluate what is coming up next," says Christine Leurquin, Senior Manager at SES ASTRA. "We can look at Galileo, GMES and Earth observation, and can guess that there really will be a conversion of these applications in the future. There will be a lot of opportunities for new businesses in that field."
Europe's first private satellite operator, Société Européenne des Satellites (SES), was started in 1985. Today it operates the ASTRA Satellite System, offering a comprehensive portfolio of broadcast and broadband solutions for customers in Europe and beyond.
SES, now operating as SES ASTRA in Europe, pioneered direct-to-home (DTH) satellite broadcasting in Europe, and has rapidly established itself as Europe's leading DTH satellite system.
It is now used by a wide range of broadcast and multimedia companies to deliver broadcast and broadband services to 122 million households.
"The technology is essential. We would not be in this business if it was not for technology. We use more and more technology onboard our satellites, and this has been possible thanks to ESA's investments. This technology is the key to becoming competitive on the global market," underlines Leurquin.
What are venture capital looking for?
Throughout the Forum’s six sessions, 36 start-up companies presented and discussed their business ideas with the venture capital professionals, opening up the dialogue on obtaining investments.
"It is important to have some really unique technology, and it is important to stress this to the investors. Another key element is the mind-set of the teams", says William Stevens, CEO for Europe Unlimited which is an advisory company that creates networks between entrepreneurs, investors and corporations to foster technology innovation.
"It is important that you show a commercial attitude, and that you are clear on how you want to push your technology on the market. This is of utmost importance to venture capital investors."
2010: Two ESA Investment Forums schedules
ESA has three Business Incubators located in the Netherlands, Germany and Italy, supporting entrepreneurs in their early start up phase to use space technology for non space systems.
"We have decided to step up this effort to sponsor events where investors can meet up with entrepreneurs and start-up companies", says Salzgeber.
"Next year we will have two ESA Investment Forums, one in Stuttgart and one in Milan. You can already now mark these dates in your calendar."
The Stuttgart ESA Investment Forum will take place 18-20 May 2010 (link to registration shortly to be added). Next year's second ESA Investment Forum in Milan will be held in October.
ESA's Technology Transfer Programme Office (TTPO)
The main mission of the TTPO is to facilitate the use of space technology and space systems for non-space applications and to demonstrate the benefit of the European space programme to European citizens. The office is responsible for defining the overall approach and strategy for the transfer of space technologies including the incubation of start-up companies and their funding. For more information, please contact:
ESA's Technology Transfer Programme Office
European Space Agency ESA
Keplerlaan 1, 2200 AG, Noordwijk ZH
Phone: +31 (0) 71 565 6208
Email: ttp @ esa.int