Once a trailing player in the space race, Europe’s space tech ecosystem has transformed dramatically. Over the past decade, it has surged from a niche novelty to a $19 billion force, up from less than $1 billion in 2014, according to Dealroom. The growth is explosive, and so are the stakes.
Behind the soaring valuations lies a complex story of ambition, friction, and urgency. While Europe defies gravity, it hasn’t yet broken free from old habits, structural inertia, and global competition.
A sector defying gravity (and market trends)
As global venture capital contracts, Europe’s upstream space sector is bucking the trend. While the broader VC market fell 44% between 2022 and 2024, European space startups saw funding rise by 6%. Deal activity reached a record high in 2023, and 2024 has already seen nearly $990 million raised, a 32% year-over-year increase. Yet space remains just a sliver of the continent’s deep tech investment, at 5%. This figure is low for an industry that underpins everything from defence to climate science.
James Cemmell, VP of Institutional Partnerships at Open Cosmos, which provides simple and affordable small-satellite missions, told TFN, “The real challenge is breakout and scale-up funding from Series B onwards. Space tech is deep tech — it needs long-term, patient capital that understands the mission.”
The sovereignty equation: Speed, scale, mindset
Europe’s space leaders agree: innovation isn’t the problem. Execution is.
In a conversation with TFN, Luca Rossettini, CEO of D-Orbit, a global space logistics scale-up, explained: “Sovereignty is not just a matter of budget. It’s about mindset, structure, and execution. Europe has the tech and talent. Now we need acceleration — from idea to orbit.”
Josh Western, CEO of Space Forge, a British aerospace manufacturing company, echoes this urgency: “True sovereignty isn’t achieved simply by matching major players’ capabilities. It comes from developing unique capabilities that others need to access.”
Yet Europe’s fragmented structure and funding delays are holding it back. Institutional capital moves slowly, and government support varies widely. Startups scale successfully only to find that global expansion often requires looking beyond European borders.
Kristina Nikolaus, co-founder and CEO of OKAPI:Orbits, end-to-end space traffic management solutions, elaborates: “Europe’s reliance on external systems poses strategic and operational risks. Delays, denials, revocations—we’ve seen how fragile these partnerships can be.”
Alan Thompson, Head of government affairs at Skyrora, UK launch vehicle provider, is direct: “Without robust launch infrastructure, we’re exposed. Relying on providers in politically uncertain regions carries significant risk.”
That dependence affects more than just Europe. Western sees opportunity: “If Europe steps up, we don’t just strengthen ourselves— we relieve pressure on the U.S. system and demonstrate our ability to shoulder global responsibility.”
Rising hubs, but uneven terrain
France leads the 2024 investment charge, with standouts like Unseen Labs and Latitude. Germany and Finland follow closely, while the UK, traditionally the upstream funding leader, has seen a decline. Munich has emerged as Europe’s spacetech capital, home to giants like Isar Aerospace. Yet innovation flourishes across the Balkans, Spain, and the Nordic regions.
“Tremendous innovation is happening across Europe. We should leverage European innovation, particularly in areas where we excel, like ISR or Galileo-linked technologies. But we must also be strategic about where we want to lead globally — and align our investments, regulations, and skill-building accordingly,” says Cemmell.
Foreign capital is rising. Homegrown support is lagging
European startups increasingly attract foreign investment. Domestic investors’ share has dropped from 76% in 2019 to 43% in 2024. While global capital fills the gap, it signals that European funding isn’t keeping pace.
Public capital, especially at later stages, remains scarce. “It can take six months just to get a decision from institutions like the EIB. That’s fatal for many promising companies. Speed is essential — without it, we risk managed decline,” warns Western.
Founders consistently report that Europe talks big but buys American. This “self-defeating regionalism,” as Bianca Cefalo, founder of Space DOTS, a company redefining space materials qualification, calls it, severely hampers progress.
“Every round I’ve raised has been led by U.S. funds,” Cefalo notes. “In the U.S., potential trumps location. Your headquarters’ location in Europe can make or break your chances.”
Where’s the money going?
In 2024, satellite technology and space transportation dominate funding, with Earth observation and launch systems leading. Yet Europe’s space remains an underdog in launch vehicle investment, securing just 5% of global VC in this segment.
Rossettini advises, “We shouldn’t try to duplicate everything the U.S. or China does. We need to double down on what we do best–and fix what’s holding us back.”
This means building secure data networks, advancing in-orbit logistics, and owning critical infrastructure. It also requires investing in semiconductors, batteries, and rare materials for a resilient space economy. “Sovereignty is more than rockets,” Westerners emphasise. “It’s about infrastructure. It’s about resilience.”
But what does “space sovereignty” really mean? Independent launch? Full supply chain control? Human spaceflight? For now, the answer is: not yet. “Europe is far from self-reliant,” says Christian Ziach, Principal at HTGF, a German pre-seed and seed investor for high-tech startups. “Without it, we risk losing global influence. We’re not setting standards — we’re following them.”
Yet the potential and talent exist. Marta Oliveira, co-founder and COO of Atmos Space Cargo, a new paradigm of space cargo logistics, sees a historic opportunity: “Europe can lead – but only if it trusts commercial innovation and makes bold, sustained investments. We need a European version of NASA’s COTS program. That’s how we build real infrastructure.”
A shift in mindset, or miss the moment
Cefalo identifies core structural issues: fragmented procurement, risk-averse institutions, and insufficient cross-border scale-up support. “We have ambition. But we lack the mechanisms to match it. Until we do, we’ll keep losing scale-ups to more decisive ecosystems.”
Nikolaus warns: “If we delay, we won’t just fall behind–we’ll be locked into rules, technologies, and dependencies shaped by others. Europe must act now to have a voice in space’s future.”
Marcell Tessenyi, CEO of Blue Skies Space, a new model of delivering data from space, adds perspective: “The space sector is evolving rapidly with the privatisation of a historically government-led ecosystem. From launchers to telecommunication and commercial Earth Observation, all segments expand through private players. Yet one area remains largely unchanged: scientific space exploration, which stays predominantly government-led.”
Despite these challenges, Europe is reconsidering its space narrative, not just catching up, but potentially leading. Rossettini reflects: “Europe missed one chance to become a geopolitical bridge between East and West. Space sovereignty offers a second chance–not just to compete, but to define a new leadership model.”
The $6 billion IRIS² constellation, with 170 satellites by 2027, marks a start. But ambition must reach beyond Earth’s orbit. “Europe must shed its follower mentality,” Ziach urges. “We need a leadership agenda– and bold moves to match. Why not build the first ESA Business Incubation Centre in space? On a future commercial station? Let startups test tech, launch services, create jobs–then replicate it on the Moon. That’s the ambition we need.”
Diversity: Still a long road ahead
Despite its high-tech image, the space sector lags in diversity. Women comprise about 20% of the workforce but hold just 11% of astronaut roles and 21% of C-suite positions. Sara Alao, CEO of Stars Edge, next-generation satellite propulsion and platform technologies, observes, “Female founders in space are rare. Few women enter engineering or adjacent fields, and they face greater challenges raising capital.” She notes that women “must work two or three times harder to secure funding” than their male colleagues.
These disparities start early, with fewer women pursuing STEM degrees, and persist through startup formation and funding, where female-led space startups remain uncommon. Data on ethnic and disability representation remains limited but indicates significant underrepresentation. Some regions, including Bavaria and parts of Africa, show promising progress through local initiatives.
Despite these challenges, Alao maintains optimism, noting that space could become “one of the most diverse industries” due to its broad range of disciplines. “Space is a field where anyone can find their place,” she emphasises, highlighting its potential for inclusivity.
The final frontier: Action
The stakes couldn’t be higher. In an era of mounting geopolitical tension, depending on non-European systems for navigation, satellite data, or communications isn’t merely inefficient – it’s dangerous. Nikolaus outlines two possible futures: “One where Europe sets global standards and leads in collaboration, exploration, and science. Another is where we become secondary players, reactive and dependent. The next few years will determine our path.”
True space sovereignty would enable Europe to become a standard-setter and soft power leader, not by mimicking others, but by building distinctive capabilities and offering global partners genuine alternatives.
“I wouldn’t be building a company here if I didn’t believe in this future,” Western affirms. “We have the talent, the geography, and the technology. What we need now is speed, boldness, and the right support mechanisms–at the right time.”
If Europe’s space aligns its mindset with its technological strengths, it can transcend mere competition to become the third strategic pillar in space, leading in sustainability, driving innovation, and building billion-euro space tech companies. But only if it acts now.
