Billionaires have a reputation for eccentrics, and for a few years now, calling them lunatics is not an exaggeration.
Some of the richest people in the world have invested in the space economy, living up to the maxim that where there is money, there are no borders.
But, after all, how does this market work? In practical terms, what does the idea of colonizing space mean? Is this a credible goal, a romantic dream, or a show of force from a new space race?
Understanding the investment of billionaires in space
Space exploration goes far beyond rockets. It triggers a steady stream of investment, and billionaires are eyeing the wide range of high-tech businesses that make up the space economy.
According to Cleonir Tumelero, PhD in Business Administration and professor at the Universidade Positivo (UP), the aerospace and defense industry encompasses the development of a series of information and communication technologies, including new materials, clean energy, advanced robotics , food, biotechnology, nanomaterials. , advanced electronics, fine mechanics, among other sectors.
“Space exploration takes place in one of the most powerful industries on the planet and the so-called space economy could reach investments of more than 1 trillion dollars by 2040,” says Tumelero.
The entry of billionaires responds to an important change in the sector. Until the turn of the century, it was the great powers that concentrated investment in space; now a few billionaires lead the sky market.
Since the explosion of the space shuttle Columbia in 2003, the United States National Aeronautics and Space Administration (NASA) has faced difficulties with manned space exploration, giving way to new forms of financing.
“NASA needed the support of the Russians and the Chinese to send their astronauts to and from the International Space Station. The American model of exploring public space came to an end and gave way to a new model strongly based on private alliances”, says Tumelero.
Who are the top billionaires investing in the space market?
According to Caio Mastrodomenico, an economic analyst and CEO of Vallus Capital, Elon Musk and Jeff Bezos are the top billionaires investing in the space market. “They didn’t get their assets in this place, but they are using their wealth to invest in this space race to maximize their fortunes,” says the CEO.
Tumelero adds that these investors mix investments to increase the contribution to space exploration. Musk, who has been in the news about the Twitter acquisition, is the founder of PayPal and Tesla; Bezos is the founder of Amazon, as well as investing in The Washington Post. And Richard Branson, another “great opportunity” in this area, is the founder of the Virgin conglomerate, which has about 400 holding companies.
When did billionaires appear on the scene?
Contributions to the space race are recent. Tumelero comments that in 2019, the US government changed the legislation in the sector and began to allow private associations for this exploration. That’s where Musk’s Spacex, one of the most valuable startups in the US, comes in; Bezos blue origin; and Branson Virgin Galactic.
The results are already showing: the three largest companies in the space market have successfully completed manned launches and are preparing to make these flights “available” (with many appointments). The flights are still open to civilians, worth tens of millions of rials.
Is it worth investing in the space market?
Leading the space race or taking a vacation outside of Earth orbit is highly unusual. Therefore, the question remains: Is it worth buying shares of companies related to the sector? Is there an expectation of a good comeback?
For Mastrodomenico it is important to study the opportunities in this market, but whoever wants to own shares in this sector must include them in a diversified portfolio.
The winnings can be interesting, but caution should be exercised, even for players with a higher ‘appetite’ for risk.
The next few years should see an acceleration in this sector, and despite the high stakes, the business is likely to be promising. “In the space race, the values are exorbitant and the challenges are limitless. The investment has not materialized yet,” says MastroDomenico.
The analyst does parallel work in the electric vehicle market. Ten years ago, Tesla might have seemed like an expensive idea, but the reality is that vehicles in this segment have gained ground and the global car series is undergoing a transformation. It is estimated that “going into space is more complicated, but recent achievements have already shown that it is possible.”
Tomillero agrees. The professor believes that the conquest of space is a unidirectional project and that the aviation and defense sectors tend to strengthen, improving the quality of life of the population due to the technological progress that it generates in various areas.
“This is a sector that has a future with high entrepreneurial potential. Despite the risks inherent in investing in high-impact businesses, this sector has the potential for success due to innovation, technology, and scaling of the business model,” says Tomillero.
At the same time, the professor reminds, risks accompany projects like this with a high degree of scalability. An example is the shares of Virgin Galactic, which fell after the company reported debts of almost half a billion dollars.
For those who want to do a national tour, Tumelero recommends the Embraer. In the country, it leads the aerospace sector and has an eclectic chain of technological partners, including start-ups.
“Although it doesn’t really take off, the aerospace sector of young players is trying to organize itself in Brazil. He even founded the Alliance of Brazilian Aerospace Startups (ASB)”, he points out.
Is human exploration in space really possible?
There is no doubt that this is a promising market. But what is the limit to effectively explore the sky? For Danilo Capelari, Physics Consultant of the Positive Teaching System (SPE), space travel is a fact that he tends to confirm. But, for actual colonization, some issues such as radiation and gravity still need to be determined.
“We would need to simulate the gravity of the Earth, with a ship with a lot of acceleration, for example, but the fuel consumption would be useless; or even a place with rotation, where the pull we feel outward would simulate our own gravity”, he comments.
Mastrodomenico also assesses the scenario cautiously. He is still too early to say what will actually be possible, as the scenario is exploratory. He says Florida researchers have managed to grow a plant on the moon for the first time, but it’s all very new, and even tests like this take time to mature.
Capelari adds that whatever the outcome of the bid for space, launches should be cheaper and more viable. So even if living on another planet remains a short-term goal of the imagination, the gains associated with the sector are welcome.
“Any investment in research, whatever the area, is very welcome. Investments allow technologies to be applied in situations that were often not imagined at the beginning of the research,” says the consultant.