The Artemis space programme has shot astronauts back into space and space tech back onto the public agenda — but the next generation of willing space tech startups will be those with applications on Earth.
The US-led Artemis II mission, which launched on April 1, will fly four astronauts around the Moon — marking the furthest humans have ever been in space. It is part of a broader Artemis programme, which aims to land humans on the moon for the first time since Apollo 17 in 1972.
It’s that end goal that’s the important one, according to Adam Niewinski, co-founding partner of deep tech fund OTB Ventures, as it “could mark a turning point in how the market perceives the space tech sector.”
“It will also represent an important step toward establishing a sustained lunar presence, creating another strong tailwind for technological development,” he tells Tech Funding News.
The space economy is tipped to reach $1.8T by 2035, up from $630B in 2023 and growing at an average of 9% per annum, according to the World Economic Forum. Venture capital investment is currently a stop in the ocean of that, however: startups developing lunar landers, transfer vehicles, and utilities raised $1.9B across 114 deals in 2025, according to PitchBook. Dollars flowing into AI, for comparison, totalled $243.9B.
Ambitions set to rise
Niewinski is seeing a growing number of space tech companies and meaningful growth in existing players. Non-specialist investors are still in the early innings of understanding the industry, he says. With space travel back in the news and a key space stock set to list on the public market, this could all be about to change.
SpaceX’s IPO filing, valuing the company at $1.75T, according to reports by Bloomberg and CNBC, adds excitement to the industry. If completed, it will mark the largest ever public debut, surpassing Saudi Aramco’s $29B float in 2019. As well as rockets, the space company runs Elon Musk’s satellite internet business, Starlink and AI arm xAI.
“This is important because it will provide the valuation and liquidity that the sector lacked for years,” Aqeel Shamsul, the co-founder and CEO of space medicine startup Frontier Space, tells TFN. “And this second wave of capital will be pumped into the industry for the next SpaceX.”
Space tech has been buoyed by national security concerns due to its dual-use capabilities across defence and AI, and the crucial role satellites play in communication.
It’s a global trend, Bauhinia Lee, who leads market development at SenFish and previously worked with the UK Space Agency’s accelerator, points out.
Japan is amongst the most ambitious; it has set its sights on a leader in space capabilities, behind only the US. Speeches by Space Scotland, the ESA, and the European Defense Fund all include dual use space tech, Lee says — this is unsurprising given NATO sees space as an “operational domain” for warfare.
“I only see this accelerating,” Lee says.
Shamsul adds: “The Artemis programme is unique in that it is a public-private partnership in comparison to the Apollo mission. NASA is now a customer rather than just a builder.”
It marks a step change in how companies work with governments; Government-as-a-service is emerging as a stable business model, Shamsul adds. He points to Intuitive Machines, a company that landed a $4.82B NASA contract.
Finding commercial applications
Investors are yet to realise space tech’s commercial applications, Lee says. “Governments are pushing in that direction, [understanding] that there is more commercial or functional use of space technology, so more downstream purposes for it,” she says, adding that this can be seen in the types of grant funding available from the European Space Agency.
SensFish, the startup Lee is part of, uses Earth observation satellites to collect ocean and maritime data with the goal of making the industry more sustainable. It was previously part of the UK Space Agency accelerator, showing how the agencies are exploring this intersection of space and land.
“While space captures headlines for its speculative frontiers, value creation is accelerating in the domain’s role as an enabling layer for terrestrial technologies,” Noah Ramos, chief strategist for innovation at research firm Alpine Macro, tells TFN. “AI is reinforcing this trajectory, with the technology’s proliferation exposing the limits of existing infrastructure.”
Nearly all 16 US critical infrastructure sectors are supported in some way by space, while the US and China launched record numbers of satellites last year, he points out. Some 4,500 satellites were launched globally in 2025, a 58% increase over 2024.
Physical AI relies on space communication
Space tech is primarily a networking play that will be critical for AI, Ramos adds, as new technology requires rapid connectivity, device density, and low latency, which are better served by satellites than land-based infrastructure.
“Space-based communication networks are arguably evolving into the most critical enabling technology for physical AI,” Ramos says. “LEO, the region extending from approximately 200 to 2,000 kilometres above the Earth’s surface, offers the optimal balance of latency and accessibility.”
How satellites talk to each other is also changing from radio frequency to laser-linked mesh.
The physics are straightforward, Ramos explains: “Light travels approximately 31% slower through fibre optic cables than it does in a vacuum. This advantage is revolutionising data transfer speeds and unlocking the latency roadblock.” Starlink satellites all communicate this way.
Radio frequency signals can easily be blocked — a characteristic Russia has exploited against GPS and communications satellites over Ukraine and Europe, he adds, meaning the development in technology is a boon for AI capabilities and defence.
This is one example of space tech that has an impact today, rather than in decades to come — which is critical for the sector to scale, according to Ali Javaheri, senior analyst for emerging technology at PitchBook.
“Capital is increasingly going toward areas with clearer demand and nearer-term relevance, especially defence-linked space systems, geospatial intelligence, satellite communications, and in-space services,” he tells TFN, adding that SpaceX’s IPO adds to that relevance by giving generalist investors “another reason to take the category more seriously.”
“Investors are a lot more focused now on execution, contracts, and whether a startup fits into a real operating stack, not just whether the vision sounds big. So I think the next wave is more likely to be built around infrastructure and services than purely aspirational space stories,” he says.
Indeed, Niewinski has long been bullish on in-space infrastructure. He named in-orbit servicing and space manufacturing as one of the key trends he’s watching, and pointed to bets he’s already made in ClearSpace and Atmos Space Cargo.
“This area is developing rapidly, together with the broader space economy. And yes, many of these companies will be dual-use,” Niewinski says.
