EquitiesFirst and the Role of Patient Capital in Europe’s Space Renaissance

The European Union’s €10.6 billion commitment to build a sovereign satellite constellation speaks to how far Europe has fallen from its space leadership. Two decades ago, Arianespace controlled over 50% of the global geostationary launch market. Today, Europe captures just 6% of the upstream space market while SpaceX launches more satellites in a month than Europe does in a year.

The Iris² program, announced in December with a 2030 operational target, will deploy 290 satellites across low and medium Earth orbits. While 61% publicly funded, the project’s reliance on private capital from operators like Eutelsat, Hispasat, and SES highlights Europe’s recognition that government funding alone cannot match the pace of commercial space development that disrupted Arianespace’s former dominance.

This public-private hybrid model also reflects broader challenges facing European deep tech companies. Unlike software startups that can scale with minimal capital, space ventures require hundreds of millions in funding before generating revenue. The mismatch between these capital needs and traditional venture capital structures has created a financing gap that alternative financing options such as equities-based provider EquitiesFirst are positioned to address.

The financing environment for the European space industry could also apply to fields like quantum computing, advanced materials, and biotechnology. European companies may have the technical excellence but lack access to the patient capital that enabled a firm like SpaceX to iterate through failures.

The Investment Environment

The STOXX Europe Aerospace & Defense Index has risen over 50% this year, reflecting investor recognition of space infrastructure’s strategic importance. Strategic aerospace financing specialists have noted the growing institutional interest in European space capabilities.

European companies like ICEYE are capturing similar attention, with the Finnish satellite maker expecting to double revenue to €200 million while exploring an IPO.

But structural challenges that contributed to Arianespace’s decline persist. The European Space Agency’s “geographic return” principle — allocating contracts based on member state contributions rather than merit — historically favored incumbents over innovation. While France and Germany finally opened micro-launcher contracts to competitive bidding in 2023, decades of protectionism left Europe unprepared for SpaceX’s reusable rocket revolution.

Strategic Vulnerabilities Drive Development

The Ukraine conflict has added urgency to these considerations. The war demonstrated both space infrastructure’s critical importance and its vulnerabilities, from GPS signal jamming to the cyberattack that disabled Viasat’s KA-SAT network on invasion day. European dependence on Starlink for Ukrainian military communications underscored the strategic risks of relying on foreign-controlled infrastructure. Investment advisory services have recognized the geopolitical drivers reshaping space investment priorities.

These geopolitical realities are reshaping investment flows toward specialized capabilities where Europe can compete. Climate monitoring, precision agriculture, space debris tracking, and disaster response represent downstream markets where European firms already hold nearly 20% global market share. Unlike launch services where SpaceX dominates, these data-driven sectors offer faster paths to profitability and differentiation.

Eutelsat’s €2 billion investment in Iris² exemplifies the new risk calculus. Despite high leverage, the company is betting that public support and strategic importance will justify the investment. CEO Eva Berneke told the Financial Times that funding won’t be required until 2028, when production begins, a timeline that would challenge most private equity or venture capital funds but suits alternative financing structures.

These longer timelines could lead to growing interest in global space technology financing for space companies seeking alternatives to traditional equity rounds, particularly in downstream applications. Equity-backed financing can allow companies to access liquid capital using their existing shares, maintaining operational flexibility through long development periods.

Finding Competitive Advantage in Specialized Markets

Airbus and Thales are exploring merger options after announcing thousands of job cuts, struggling to adapt from building expensive geostationary satellites — Arianespace’s traditional payload — to competing in the low-Earth orbit market. Their challenges create opportunities for startups but highlight the capital intensity of achieving meaningful scale.

In the Financial Times, Philippe Baptiste, president of France’s CNES space agency, emphasized that competitiveness must drive decision-making: “If Thales or Airbus want a heavy share they have to be very good and very competitive,” he said.

Succeeding in this environment requires companies to have sufficient capital to compete on capabilities. Alternative equity-backed financing solutions have become increasingly relevant for space companies navigating these competitive pressures.

The global space economy’s projected growth to €1.6 trillion by 2035 suggests the window for European companies remains open, particularly in specialized markets like climate monitoring and space sustainability. But capturing this opportunity requires learning from Arianespace’s fall, matching technical innovation with financial innovation that can sustain long development cycles and accept strategic risk.

The challenge is creating financing structures that allow these companies to scale at market pace. Those who solve this equation — whether through alternative financing, public-private partnerships, or new fund structures — will determine whether Europe captures its share of the space economy.