The European Space Policy Institute (ESPI) has released its latest annual report on the European and global space sector. The report aims to spotlight investment dynamics in the private investment sector within the global space market. For the first time, the institute, in collaboration with Space in Africa, the market leader in media, research, and consulting, introduced a section focused on African space industry data, spotlighting data from the sub-Saharan continent.

Key Takeaways 

The Space Venture Europe 2023 report presents a compelling narrative of the African space economy. The data reveals a robust growth trajectory, surpassing the continent’s GDP growth rate. Projections indicate a continued upward trend, with an anticipated growth of 16%, propelling the sector to a staggering USD 22.6 billion by 2026. This data underscores the immense potential of the African space industry, making it an attractive prospect for investors and a strategic focus for policymakers.

The African NewSpace sector exemplifies the continent’s diversity and innovation. Over the past decade, nearly 60% of the new space companies have been established across 37 African countries, highlighting the increasing interest of African space actors in utilising space-based technologies to solve localised challenges. Southern (60%) and Western Africa (27%) led the growth of emerging NewSpace companies in Africa. In addition, Eastern Africa accounted for 25% of NewSpace companies, while Northern Africa slightly followed behind with 14%. Lastly, Central Africa is the outlier, with just 3% of the companies founded in the region. This rich and varied landscape of the African space industry is intriguing and promising, reflecting a burgeoning ecosystem with potential.

 Furthermore, the report breaks down the African NewSpace sector into two main segments – downstream and upstream – encompassing six broad market segments: Earth Observation, Satellite Communications, Manufacturing, Capacity Development, Satellite Navigation, and Astronomy. Earth observation providers constitute nearly 60% of the market, highlighting the continent’s emphasis on data collection and analysis. Satellite communication operators follow closely behind, accounting for 25% of the industry, indicating a significant investment in communication infrastructure. In comparison, the Manufacturing segment represented 7% of the market, showcasing efforts to develop indigenous capabilities. These segments represent the most active areas of Africa’s space activities, reflecting a diverse and dynamic landscape.

However, one of the biggest challenges of the African space sector is the inability to access funds and investments to further their space interests and activities. Thus,  most NewSpace companies are bootstrapping, relying primarily on national and regional government entities, international organisations, and NGOs as their core customers. As of February 2024, these companies have collectively raised an impressive USD 184 million across 35 investment rounds. Notably, of these investments, 84% have been secured since 2021. In particular, the year 2023 stood out, attracting USD 49 million in investments, representing 27% of the total and making it the second-highest investment year

Space in Africa insights show that most 35 investments recorded over the past decade have been directed towards downstream companies. Specifically, thirteen companies providing downstream applications and services raised USD 156.2 million across 25 investment rounds. In contrast, seven upstream companies collectively secured only USD 28 million, representing a mere 15% of the total investment. This disparity suggests a significantly greater investor interest and confidence in the downstream segment of the space industry, likely driven by market demand, revenue potential, and lower perceived risk level.

For more insights, download the ESPI’s Space Venture Europe 2023 Report here.