Europe launches fund to invest in space startups

WASHINGTON — The European Commission is rolling out a new program to offer investment for European startups to keep those companies on the continent.

Officials from the European Commission, European Investment Bank and European Investment Fund announced Jan. 25 they were committing at least one billion euros ($1.12 billion) over five years to Cassini, a program that will provide early-stage funding for European space companies.

The intent of Cassini is to provide European support for those startups to keep them from looking elsewhere, particularly the United States, for funding, which might lead those companies to leave Europe.

“European space entrepreneurs feel that there is a lack of private financing sources. They, therefore, tend to keep an eye on private capital outside of the E.U., especially the United States,” said Kris Peeters, vice president of the European Investment Bank, during a speech at the 14th European Space Conference where he and other officials announced the fund. “European public financial instruments play an essential role in unlocking private capital for the space sector.”

Thierry Breton, the European Union commissioner responsible for space policy, offered similar sentiments at the conference. “Many of our startups cannot get the equity investment they need in Europe. They have no choice but to turn to non-E.U. investors. Of course, this is a loss of opportunity and also a major risk for Europe.”

Breton, Peeters and Alain Godard, chief executive of the European Investment Fund, signed a joint statement at the conference formalizing their partnership on Cassini. That was followed later in the day by another joint statement by officials with the E.U., European Space Agency and European Investment Fund.

“Europe is lacking access to funding in order to allow industry to flourish,” said Josef Aschbacher, director general of ESA, at the signing of the second joint statement regarding Cassini. “Europe is full of ideas, it’s full of energy, but they need the means to transform these ideas into projects, into program and into activities.”

Those officials, though, offered few details about how Cassini will invest in European startups. During a later panel session at the conference, Guillaume de La Brosse, head of the innovations, startups and economics unit at the European Commission directorate responsible for space, said the European Investment Fund will partner with venture capital funds in Europe for Cassini. Those funds will make their initial investments in the second half of the year.

“It’s exactly what we need because what we’re facing today is that you need equity to scale up, but private investors are not willing to invest because they perceive this sector as too risky,” he said. “So we need to un-risk that sector.”

Executives with European space companies on the panel welcomed Cassini while also noting that the environment for space investment in Europe was already improving. “Five years ago, the situation was completely different,” said Nicolas Capet, chief executive of Anywaves, a French antenna manufacturer. At that time, he said, space was still considered in Europe to be the realm of governments and large companies only.

“In five years, the number of possibilities that have been developed and implemented by institutions is just incredible,” he said, including support from ESA and national governments. “I think there are a lot of huge things that are already implemented.”

“We’re living in a moment where the mindset is changing, and it’s very exciting for us,” said Clément Galic, chief executive of Unseenlabs, which is developing a constellation of maritime intelligence satellites. Cassini, he said, “will push the private investors to follow.”

“We are European. Why should we have to move?” he said. “But, to be honest, we will not put the company into danger. If we need to raise money out of Europe, we will do so.”