Billionaire entrepreneurs using their wealth to launch successful space companies has made the sector far more accessible to smaller start-ups.
The reliability of the space launches from the likes of Richard Branson, Jeff Bezos and Elon Musk, due in part to their vast financial backing, has dragged down insurance prices for smaller firms in the sector.
“What the entrepreneurs have done…is completely change the economics of space”, Seraphim Space‘s managing partner Robert Desborough told City A.M., which means companies can build ‘mega-constellations’ of satellites to help with issues with navigation, telecoms and climate change.
“A lot of people criticise the Bezos’ and the Musk’s for their extravagance. But they’ve helped reduce the costs of launch and the costs of insurance by a massive amount,” Anthony Baker, founder and CEO of London-based Satellite Vu also told City A.M.
Once forking out some $50,000 for launches, the likes of Musk – who earlier this year secured a $2.9bn deal with NASA – have brought this figure down to around $5,000, Baker said.
“Whether it’s right or wrong with what they do in their spare time…the fallout is great for small businesses.
“He’s damn reliable. When I was planning [launches], you had to assume that you lost one in 10 satellites. I’ve paid a 25 per cent insurance premium on a whole project just because of the odds of things going badly. Now it’s low single digits, because Elon’s satellites rarely, rarely, rarely fail.”