Global funding for the spacetech startup sector has remained strong, holding steady at over $6 billion annually for the past two years. Early data shows that 2025 is on pace to match those numbers. Startups working in satellite technology, reusable rockets, defense systems, and geospatial data continue to attract major funding.

While total investment hasn’t changed dramatically, the focus of investors is shifting.

What’s Driving the Change in Spacetech Investment?

Investor priorities are evolving due to several global and technological trends. According to a new report from venture firm Space Capital, these changes are influenced by:

• Geopolitical tension, including concerns about China’s growing space and missile programs.
• Global defense spending, such as Europe’s ReArm Europe plan, which could channel up to $870 billion toward military innovation.
• Market volatility, which is affecting how investors evaluate risk.
• New technology, especially in areas combining space and geospatial intelligence with emerging tech.

Despite these shifts, interest in spacetech startups remains high. “We’ve never seen stronger investor demand,” said Chad Anderson, managing partner at Space Capital.

Key Q1 2025 Spacetech Startup Deals

The first quarter of 2025 saw several large funding rounds for spacetech startups, signaling healthy investor appetite:

• Stoke Space (Kent, WA): Raised $260 million in a Series C round to continue developing reusable rockets. Total funding to date exceeds $436 million.
• Loft Orbital (San Francisco, CA): Secured $170 million in Series C funding to expand its satellite leasing services.
• K2 Space (Torrance, CA): Collected $110 million in Series B funding to scale its satellite manufacturing.

Although total deal count dipped slightly compared to previous quarters, the amount raised was in line with recent trends.

Growing Interest in Spacetech + AI

One emerging trend is the combination of spacetech and artificial intelligence. More spacetech startups are using AI to create real-time insights from satellite data or improve spatial analysis.

Recent examples include:

• Muon Space and the Earth Fire Alliance launched FireSat, a satellite constellation to monitor wildfire threats using AI. The first satellite went into orbit in March.
• Planet Labs partnered with Anthropic to use its Claude platform to analyze Earth imaging data.
• Niantic, after selling its gaming unit, launched the Niantic Spatial platform—blending geospatial AI with augmented reality experiences.

These developments highlight the growing overlap between spatial data and intelligent systems, driving a new wave of innovation.

Public Market Volatility Still a Risk

Despite ongoing investment, public market instability poses a challenge for spacetech startups looking toward future exits. After a surge in late 2024, stock prices for major space companies and defense contractors, including Lockheed Martin, have dropped in recent weeks.

Tariff reductions helped stabilize markets slightly, but volatility remains a concern. Still, many well-funded startups are in a strong position to ride out the uncertainty.

Outlook: Resilient Sector, Evolving Strategies

The spacetech sector continues to attract billions in funding. While investor strategies are adjusting to global trends and emerging technology, the demand for spacetech startups remains strong.

As markets shift and technologies evolve, successful startups will be those that adapt quickly—especially in areas combining space capabilities with next-generation tools like AI.