These predictions come in the wake of December’s surprise announcement that Scottish rocket manufacturer Orbex has put work on its own launch site in Sutherland on hold and will instead focus on development of spacecraft designed specifically for take-off from Shetland rival SaxaVord. Orbex chief executive Phil Chambers says the switch will allow the company to achieve first launch in 2025.
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Matt Crocker is director of corporate finance at Birmingham-based Heligan Group, which focuses on investment in the areas of national security, crime prevention and public safety. He notes that the number of space-related companies across the UK grew by 25% last year, with Scotland “well-primed” to be a leading geographical player in Europe and beyond.
“We expect a lot more inbound investment to help enable growth [in 2025], and for those companies which make the transition from start-up and scale-up into profitable companies, it’s going to be a challenge to keep them within the UK due to their capability,” Mr Crocker said.
“There’s lots of M&A within the major countries and the Five Eyes community, whereby defending our sovereign capability is going to become increasingly more paramount going forward.”
Will Whitehorn, the chairman of Seraphim Space, said investor sentiment towards growth-oriented opportunities such as those in space sector should improve as concerns about inflation and high interest rates subside. Other favourable market trends include growing engagement between national governments and emerging space technology companies.
He added that businesses within the Seraphim portfolio are “really motoring forward” as they secure a growing number of commercial contracts.
“I think one of the things you will begin to see is some M&A activity above and beyond what has traditionally happened in space,” Mr Whitehorn said. “You normally tend to get that in this next phase of industries developing.
Will Whitehorn (Image: Nick Ponty)
“This is a very rapid change, and as I’ve said before, the public haven’t caught up with it yet. The public still see space as something exotic – they’ don’t see it as having the capacity to solve the problems it’s going to be solving, because no one is telling them.”
While many were surprised when Orbex announced it was switching its launch plans to SaxaVord, Mr Whitehorn said the decision was “not unexpected” as he believes there is only room for one such facility to succeed within any geographical region.
“If you look at where spaceports go around the world, you don’t put two in French Guiana, and you don’t put two in Cape Canaveral,” he said. “You don’t put two in any single location because each one has a possible specialism in terms of where it can get to, either an orbit that is polar or equatorial.”
Both Sutherland Spaceport and SaxaVord are positioned for polar orbits, which are at lower altitudes and used for Earth observation.
Based in Moray, Orbex took responsibility for the operational management of Sutherland – a project originally headed up by Highlands and Islands Enterprise (HIE) – in November 2022, with construction getting underway in May 2023. The £20 million project had a confirmed public investment package of £14.6m, including more than £9m from Highlands and Islands Enterprise.
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Mr Crocker at Heligan said although the decision to mothball Sutherland will impact the creation of new jobs in the area, the potentially cheaper cost of launching from a comparable nearby facility makes economic sense.
He added that one of the challenges facing the industry in the UK is “the tendency to deliver short-term results when you are in a long-term market”.
“When it comes to the space sector, I think everyone just needs to take a long-term view here because across the UK and particularly in Scotland the foundations are there for hopefully creating the next SpaceX within the next 10 years,” he said.
“Investors in the UK really like IP rich businesses, and there’s lots – the Higgs Centre in Edinburgh and lots of spin-outs from universities – which are focused on downstream applications, whereby larger companies in North America and across Asia are really investing heavily in large launch rockets. The UK is obviously specialising in smaller satellites, but where I generally think the UK is leading is in data-driven applications.”
Orbex chief executive Phil Chambers, pictured to the left with chairman Miguel Belló Mora (Image: Orbex) Mr Whitehorn said the odds are “quite high” that SaxaVord will achieve the UK’s first vertical rocket launch in 2025. Although Seraphim doesn’t invest in launch technology – its focus is on data and applications – he noted that political developments favour the Shetland spaceport.
“The issue for launch companies previously was that there was more than enough launch capacity,” he said. “The opportunity they have got now though is that the Russians have cut themselves out of the launch market entirely, and so there is a market for small [polar orbit] specialist launches.”
And while political events in the US have had their “ups and downs”, Mr Whitehorn said the renewed priority on the space industry under NASA’s new administrator, billionaire astronaut and entrepreneur Jared Isaacman, will have a significant positive impact on investors’ attitude towards the sector.
“I think NASA will get a fillip from him,” Mr Whitehorn said. “He is a good choice.
“America got a big shock when they realised earlier [last] year that China’s state expenditure on space had overtaken America’s, and in the second half of [2024] they did something about that.”