In 2021 alone, financiers have so far poured nearly $25 billion into private space ventures.
Space Capital — a venture capital firm that invests in early-stage space technology — points out in its most recent quarterly report that the past year has been historic for the private space industry. In July, Virgin Galactic won the private space race, sending a vessel 53 miles above the Earth — making its founder, Richard Branson, the first human to enter into space in his own vehicle. Days later, Jeff Bezos reached an altitude of 62 miles on his Blue Origin spacecraft. Meanwhile, Elon Musk’s SpaceX is preparing to launch its massive Starship rocket into orbit.
Space Capital explains that record levels of investment are following the billionaires:
With another $8.7B invested into 112 space companies in Q3, there has now been $231.2B of equity investment into 1,654 unique companies in the space economy over the past 10 years. VCs invested another $3.9B into 83 space companies in Q3, of which $2.0B went to U.S. companies. Infrastructure companies have already hit a new record, with $10.3B invested YTD (6% more than full year 2020), driven in part by SPACs.
The report also notes that American firms account for two-thirds of the investment in space hardware and software — followed by the United Kingdom and China.
Despite its promising future, some lawmakers are already attempting to regulate the space industry. Days after Branson and Bezos launched their first tourism missions, Rep. Earl Blumenauer (D-OR) proposed the Securing Protections Against Carbon Emissions (SPACE) Tax Act which would establish a new excise tax on commercial space flights carrying human passengers for purposes other than scientific research.
The tax would be applied in two tiers — the first for suborbital flights exceeding 50 miles above the Earth’s surface and the second for orbital flights exceeding 80 miles above the Earth’s surface.
“Just as normal Americans pay taxes when they buy airline tickets, billionaires who fly into space to produce nothing of scientific value should do the same, and then some,” Blumenauer explained. “I’m not opposed to this type of space innovation. However, things that are done purely for tourism or entertainment, and that don’t have a scientific purpose, should in turn support the public good.”
Earlier this year, Sen. Elizabeth Warren (D-MA) revealed similar sentiments toward Bezos and Blue Origin.
“Look, he’s laughing at every person in America who actually paid taxes,” Warren told TMZ. “Jeff Bezos’ trip to outer space is being financed by all the rest of the U.S. taxpayers who paid their taxes so that Jeff Bezos didn’t have to. And Jeff Bezos kept all his money and used it on his space ticket.”