Even in space, there’s no escaping the build-up to Thursday’s general election. Britain’s space companies gathered in Leeds last month at an event organised by the UK Space Agency. But the agency itself had to largely sit it out because of the restrictions on government departments after an election is called. Nonetheless, exhibitors and attendees mingling around the pop-up planetarium at the Ignite event were united in their optimism about the opportunities for growth in the sector.
Space is undoubtedly big business — the industry is expected to be worth $1.8 trillion worldwide by 2035, according to the consultancy McKinsey, up from $630 billion in 2023. Satellite navigation and communication is now taken for granted, and an estimated 17.7 per cent of Britain’s GDP depends on such services from space.
Rocket-builders with billionaire owners such as SpaceX and Blue Origin grab headlines, but in the UK, about 90 per cent of the 1,590 businesses in the space sector have revenue of less than £5 million, according to the latest government figures.
However, with more opportunities to supply the new private space companies, as well as the traditional large aerospace and defence contractors, the last government identified the sector as a winner, providing financial support to early stage companies through the UK Space Agency (UKSA).
Programmes such as the Space Clusters Infrastructure Fund (SCIF), which last year awarded £47 million to 12 projects across the UK to build space research, manufacturing and testing facilities, are helping SMEs to secure additional private sector funding to expand.
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Bristol-based iComat, for example, received £4.8 million in funding from SCIF to build an automated factory in Gloucester. The company, spun out of Bristol University in 2019 by the chief executive Evangelos Zympeloudis, produces parts for spacecraft, planes and Formula 1 cars from carbon fibre composites.
The manufacturing process is what makes iComat different — based on work done during Zympeloudis’s PhD on composite materials used in aerospace manufacturing, the company can cut curved parts, which are shaped to the manufacturer’s design. In the past carbon fibre parts have been built up from layers of straight fibres, because the fibres lost strength when curved.
As a result of cutting more precise shapes, parts made by iComat can be 10 to 65 per cent lighter, Zympeloudis said. The weight saving is the priority for space customers, but the manufacturing process, which is patented, is also automated and faster.
This month the company announced it had raised $22.5 million from venture capital investors, led by 8VC, a Texas-based technology investor. The money from the UKSA to help build the factory was an important part of securing the new funding round, said Zympeloudis.
“It gives us production capacity and a facility where we can show people how our technology is used,” he said. “It’s difficult for any company to fundraise in this market, and we make hardware — not many people like to invest in capital expenditure.”
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His company employs 30 people and it is using some of the money raised to increase that to 50 by the end of the year, and 80 by the end of 2025. Revenue in the last financial year was £5 million.
Similarly, Magdrive, based at the Harwell science campus near Oxford, is using £1.8 million of funding from SCIF to cover part of the cost of building a £3 million testing facility for its electric propulsion systems. These are designed to move satellites around in space; for example, to re-align constellations of small satellites used for communications or Earth observation.
The new facility will also contain three clean rooms, where the company aims to assemble the first 100 units it sells to customers.
Magdrive was founded in 2020 by Thomas Clayson, 33, who has a PhD in plasma physics, and Mark Stokes, 34, whose background is in mechanical engineering. The company now has 16 staff and will launch its first two thrusters into space with a customer in 2025, on board one of SpaceX’s Falcon 9 rockets.
Magdrive’s ambition is to build ever-bigger thrusters capable of moving larger satellites weighing 100kg or more, and the intention is to start building a second manufacturing facility in 2026.
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The contribution from SCIF, as well as earlier grants from Innovate UK and UKSA, “have helped significantly to de-risk the company for our VC investors”, Clayson said. The company has raised £2 million from venture capital firms so far, led by Founders Fund, an early backer of SpaceX and Facebook.
Although the companies actually launching rockets are not British, the potential for UK companies to build satellites, satellite components and tools for maintaining and extending the life of spacecraft is “considerable”, Clayson added.
An early-stage example also exhibiting at Ignite was Lodestar, founded by Neil Buchanan, 26, and Thomas Santini, 24, in 2023. Both were interested in opportunities for 3D printing in space when they met on a business incubator programme run by Entrepreneur First. But they quickly came to realise there were a number of technological developments that needed to happen before that would be a viable business.
They became interested instead in the question of how spacecraft and equipment used in space can be maintained. Their business has developed a prototype robotic arm that can grab and hold objects as small as cube satellites of 10cm by 10cm by 10cm. This year the arm went on a zero-gravity flight with a team from the Massachusetts Institute of Technology in the US, to prove it could operate safely in those conditions.
“The space sector is moving away from ‘launch and forget’,” Santini said. “But being able to inspect, repair and protect spacecraft is a huge challenge because we need to develop the equipment that can move around and ‘see’ and also safely hold things in space.”
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Lodestar’s ambition is to build a fully autonomous repair arm, and the company has so far raised $1.5 million in grants from the UKSA and monies from venture capital funds. It has seven staff at its headquarters in Somerset House, London.
The cost of proving a technology works in the environment of space is the significant hurdle for every SME in the sector, and funding made available by UKSA helps UK companies make it through the early stages and compete with well-funded rivals in the US, said Zympeloudis of iComat.
