NEWS: It’s All About Space. Two Regional Efforts Launch to Accelerate Space-Related Startups

A decade ago in the aviation industry, shrinking technology, falling prices and increasing capability meant that for the first time, airlines could completely upgrade air frames every four or five years.

Now this trend is happening in the space industry. There have been more changes in the last six years than in the previous 25.

Reusable rockets, 3D printing, advanced materials and miniaturization of satellites, known as “smallsats” – along with advanced propulsion systems — are making it less costly to both go to space and build satellites.

It wasn’t so long ago that launching a spacecraft could only be done through a sophisticated government program. Last December, the Weiss School in Florida – a middle school – launched its own satellite, proving that the entry barriers to get into space have essentially dissolved.

Add to that a presidential administration that’s bullish about space, and as a result, is spending money on it in a more expedited fashion, and you have the perfect environment for tech and startups focused in this realm.

Bank of America Merrill Lynch recently estimated that the space economy will be worth more than $3 trillion by 2045.

And, in Q3 2018, more than $370 million flowed into the space industry nationally, driven by growth in Series B rounds, according to Space Angels, the leading source of capital for space startups.

Two SoCal endeavors have been established to capitalize on this.

One is Techstars in LA, which has joined with Starburst to create a space-focused accelerator.

The other is the Space Ventures Coalition, a partner of the Alliance for SoCal Innovation.

It’s focused on identifying emerging tech in the space industry.

The Alliance for SoCal Innovation is one of the initiatives to unify the innovation ecosystems of LA, SD and OC, by connecting entrepreneurs to capital and partnerships to accelerate their growth in SoCal.

About the Accelerator
Techstars runs close to 50 accelerators and programs around the world. The space accelerator will be Techstars’ third in LA, along with its more general program, Techstars LA, and its music accelerator.

“We’re bullish on the tech LA ecosystem, and we’re always looking for categories we think are being disrupted with lots of opportunities to invest in great entrepreneurs,” said Matt Kozlov, managing director of the Techstars Starburst Space Accelerator.

Matt Kozlov, managing director, Techstars Starburst Space Accelerator

He previously ran Techstars’ healthcare accelerator in partnership with Cedars Sinai. And, he’s invested in more than 30 companies, two-thirds of which are in LA.

Plus, LA has been historically strong in this realm with leaders like Northrop Grumman, Raytheon, and more recently, Space X.

“There’s a lot of engineering talent and great entrepreneurs and VC money in SoCal,” Kozlov said, noting that the VC money has mostly been raised for seed and Series A rounds.

Sponsors of the accelerator include NASA’s Caltech Jet Propulsion Laboratory, (known as JPL), Lockheed Martin, and the U.S. Air Force, with support from the Aerospace Corporation, an LA-based federal lab focused on space technology.

Techstars has already made investments in space tech startups like Slingshot Aerospace, which went through its LA accelerator; as well as Kepler Communications and Skywatch, both with HQ in Toronto.

Slingshot builds next-gen satellite-, aerial- and drone-signal processing AI-powered software. It’s received $8.4 million in funding to date.

Kepler is a satellite communications company that’s received more than $21 million.

SkyWatch provides a digital infrastructure for the distribution of Earth observation data and derived intelligence. It’s raised more than $4 million.

“We wanted to double down and build a program to help entrepreneurs tackling big challenges in the space industry,” Kozlov said.

He added that Techstars is especially interested in companies like Slingshot, which are using AI to draw insights from satellite info and infuse that with additional data points to draw value.

Other realms doing this include geo-spatial analytics companies targeting finance and agriculture, as well as oil and gas companies.

With JPL being an expert in the propulsion realm, Techstars is also looking for novel technologies in this industry.

Other things it’s looking for are companies developing autonomous systems and robotics in space, companies innovating in design tools and collaboration and companies involved with power management and power storage.

Startups in manufacturing, agriculture, mining, automotive, oil and gas would be considered as well, as long as they’re developing tech that has an application for space.

An example would be a manufacturing company that’s created an AR experience for virtual twinning. That’s when you create a duplicate environment of a space in a digital reality, a digital twin, so to speak.

“So if you’re sitting on a factory floor, someone else can be sitting there (with you, remotely) and trouble-shooting,” Kozlov said. “It has a lot of interesting apps for space as well. Like for the international space station.”

For the space accelerator, Techstars partnered with Starburst, which has been working in the aerospace and defense sectors for several years, helping large aerospace companies scout for innovation and working closely with startups.

Ten companies will be accepted in the first cohort. They have not been identified yet.

Space Ventures Coalition
The coalition has a lot of synergy with the space accelerator. The sponsors of the accelerator – all federally-funded labs – essentially joined forces for the coalition, including the Aerospace Corporation, JPL and the Rand Corporation.

The coalition is connected to the University Space Research Association, a nonprofit in Maryland that focuses on space tech coming out of universities.

And, it works with the NASA Neil A. Armstrong Flight Research Center at Edwards Air Force Base. That enables its partners to test rocket engines.

And another partner is MD5, the Pentagon’s own accelerator in Virginia. It helps identify and sometimes funds startups that work on commercial and government programs.

Whereas Techstars’ accelerator focuses on startups, the coalition is looking for entrepreneurs who aren’t even ready for an accelerator program yet, Andre Doumitt told OC Startups Now. He’s the director of innovation development at the Aerospace Corp.

So it partners with universities and early-phase start-ups to expose entrepreneurs to commercial and government space programs and connect them with users of the planned product or service.

It’s seeking software, hardware, materials and new manufacturing techniques.

One scenario could be a student or professor who’s received grant money for their tech from the National Science Foundation, but needs about another 12 to 24 months to fully develop it.

“We want to help people go from lab to launch here in SoCal and beyond,” Doumitt said.

The coalition has been focused on SoCal, enabling it to develop a model where universities, startups, large companies, government agencies, entrepreneurs and investors can converge on an industry vertical in a large geographic area and create new capabilities that bring value to commercial and government space programs.

The next effort is to replicate the power of the “geographic industry vertical” model in other regions like Washington, D.C., the Denver/Colorado Springs area and other regions that are similarly conducive.

About The Author

Deirdre Newman is a long-time journalist, who's covered OC startups for a few years.

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