The future of space capital lies in private equity
From childhood, J. Brant Arseneau knew he wanted to be an astronaut.
Unfortunately, that wasn’t in the stars (and he has the Canadian Space Agency rejection letter to prove it), so he set his sights on growing capital to get him into space.
Inspired by the likes of Elon Musk and Jeff Bezos, Arseneau tells FreightWaves President George Abernathy that it took meeting up with a Canadian astronaut to understand how he could merge finance technology with space exploration.
Arseneau was told, “The space industry is full of really brilliant technicians and engineers and thought leaders around the product of domain, but they don’t have a lot of experience raising capital or running companies.”
He started 9Point8 Capital to fill that niche, supporting emerging space companies by raising private equity capital.
Arseneau is now working with Space Ventures to provide investors a pathway for their money to be put into space exploration.
Abernathy asks if there will be a migration of private equity investors into the space market. Arseneau thinks so, with the midmarket range being well serviced.
He says limited partners have a seven- to 10-year expectation on returns, but venture capitalists need to have a longer investment horizon to support the development of the space market.
Arseneau thinks that investors need to understand companies are already doing the groundwork to get launched and that “we’re currently building the infrastructure” needed before space becomes profitable.
He calls this “space 2.0, an in-space economy, where you have two entities in space doing commerce with each other with really no connection to Earth other than maybe a product going back.”
So what will the actual supply chain in space look like? Arseneau says developing that idea right now is crucial to the success of his “space 2.0” idea.
He points out that logistics will be incredibly important because space supply chains involve getting things out to moving targets like planets and asteroids.
Space Ventures is the central point of industry-specific space data, Arseneau says, with 2000 space companies currently in their database.
Commercial space isn’t just for the private sector; Space Ventures is working with the government to source grants and a development bank to build uniform expectations and “remove some of the volatility of a transition from a government-funded industry to a purely commercial industry.”
Arseneau thinks this is more near-future than science fiction, and people like Musk and Bezos are proving how close the access is.
He says the idea of regular people looking at Earth from the perspective of the space station is “eye-opening” and could be within reach in the next decade.