The space industry is projected to be worth $1.8 trillion globally by 2035, up from $630 billion in 2023, according to McKinsey.
In the UK, satellite navigation and communication underpin an estimated 17.7% of the nation’s GDP. While billion-dollar rocket companies like SpaceX and Blue Origin capture headlines, the UK’s space sector consists predominantly of small businesses. Approximately 90% of the 1,590 businesses in the sector generate less than £5 million in revenue, as per recent government data.
Recognising the sector’s potential, the previous UK government provided financial support to early-stage companies through the UK Space Agency (UKSA). Initiatives such as the Space Clusters Infrastructure Fund (SCIF), which awarded £47 million to 12 projects last year, are instrumental in helping SMEs secure additional private funding and expand their operations.
For example, Bristol-based iComat received £4.8 million from SCIF to construct an automated factory in Gloucester. Founded in 2019 by Evangelos Zympeloudis, iComat specialises in manufacturing carbon fibre composite parts for spacecraft, planes, and Formula 1 cars. The company’s unique process, developed during Zympeloudis’s PhD, enables the production of curved parts that are significantly lighter than traditional straight-fibre composites.
iComat’s innovative approach, which results in parts being 10 to 65% lighter, recently attracted $22.5 million in venture capital funding led by Texas-based 8VC. Zympeloudis noted that the UKSA funding was crucial in securing this investment, providing production capacity and a facility to demonstrate their technology.
Similarly, Magdrive, located at the Harwell science campus near Oxford, is utilising £1.8 million from SCIF to build a £3 million testing facility for its electric propulsion systems, designed to move satellites in space. Founded in 2020 by Thomas Clayson and Mark Stokes, Magdrive plans to launch its first thrusters aboard a SpaceX Falcon 9 rocket in 2025. The SCIF and other grants have significantly de-risked the company for investors, helping Magdrive raise £2 million from venture capital firms.
While the UK does not currently host rocket-launch companies, the potential for British firms to produce satellites, components, and maintenance tools is substantial. Lodestar, a start-up founded in 2023 by Neil Buchanan and Thomas Santini, exemplifies this potential. Lodestar is developing a robotic arm capable of handling small satellites and has raised $1.5 million in grants and venture capital to advance its technology.
The high cost of validating technology in space remains a significant challenge for SMEs. However, funding from the UKSA plays a vital role in enabling UK companies to compete with their well-funded US rivals, according to Zympeloudis of iComat.
