Steven Jorgenson, Starbridge Venture Capital - The Launch Sector is Literally Less Than 2% Of The Space Industry | #223

Episode Summary

Executive Summary: The episode explores the space economy through the lens of VC investor Stephen Jorgensen, who argues that “space” is much broader than launch and is becoming investable through cheaper access to orbit, government contracts, and commercial applications like manufacturing, communications, and Earth observation. He outlines Starbridge’s thesis, portfolio examples, and a decade-plus roadmap from orbital manufacturing to Mars missions.

Main Topics: Space as an investable economy beyond launch (Priority: 5/5): Jorgensen emphasizes that launch is a small part of the sector and that communications, satellite services, and downstream applications represent the real economic opportunity. Launch-cost disruption led by SpaceX (Priority: 5/5): He explains how SpaceX compressed launch costs by an order of magnitude, enabling new business models and making more of the sector viable for venture investment. Microgravity manufacturing and research (Priority: 5/5): The conversation highlights in-space manufacturing as a major frontier, including 3D printing, fiber optics, semiconductors, and biotech research that benefit from microgravity. Starbridge’s investment approach and criteria (Priority: 4/5): Starbridge focuses on Series A but sometimes seeds/pre-seeds, prioritizing companies with signed customers, clear milestones, defensible technology, and paths to exit. Portfolio case studies: Made In Space, Axiom, Link, Umbra (Priority: 4/5): Jorgensen uses specific investments to illustrate themes such as in-space manufacturing, commercial station development, direct-to-cell satellite communications, and synthetic aperture radar imaging. Timeline for the next decade of space (Priority: 4/5): He offers a roadmap that includes commercial LEO stations, lunar infrastructure, in-space manufacturing at scale, and eventual cargo missions to Mars and human landings later in the decade or beyond. Research, networking, and education in space investing (Priority: 3/5): He recommends conferences, podcasts, analyst reports, and direct industry relationships to understand the sector, noting that diligence is essential because the industry is technically complex.

Key Arguments: The launch sector is not the core of the space economy; it is less than 2% of the industry, while communications and downstream services dominate revenues. SpaceX has dramatically lowered launch costs, turning previously impossible business cases into investable ones. Microgravity is a unique experimental environment that can improve manufacturing and research outcomes for materials, optics, crystals, and biotech. Government contracts remain an important stabilizer for space startups during volatile markets, but long-term growth must come from commercial demand. The best investments are often in enabling infrastructure and terrestrial-adjacent markets, not just obvious “space” companies. Access and network matter heavily in space VC because many of the best deals are relationship-driven and not widely available. Starbridge invests only when there is high visibility on milestones and usually prefers companies with signed customers and clear revenue pathways. Exits are still early-stage and often rely on acquisitions, secondaries, or strategic transactions rather than traditional IPOs. The coming decade could bring commercially operated space stations, lunar bases, in-space manufacturing, and eventually Mars missions. Space investing requires patience and a long-term mindset; the biggest returns come from holding through multi-decade compounding themes.

Data Points: Launch share of space industry: Less than 2% - Jorgensen says launch is a very small part of the broader space economy. Launch cost on shuttle era: About $20,000 per kilogram - Historical benchmark for cargo launch costs cited in the discussion. Recent launch cost: A couple thousand per kilogram, often below that - He describes the decline in launch costs over the last few years. Potential Starship impact: ~50% additional cut - He expects Starship to reduce cargo launch costs further if it comes online in the next 2–3 years. Space economy size: About $400 billion - Referenced when discussing the broader space economy and its composition. Small launch company count: About 140 companies - He says there was an influx of small launch startups competing for financing and contracts. Starbridge fund count: Fund two - The interview notes Starbridge is on its second fund. Starbridge global VC count: About five firms worldwide - Jorgensen claims there are roughly five space-focused VCs globally, including three in the U.S. and two overseas. Made In Space contract: $70 million - Used to demonstrate 3D printing in space for satellite and structural components. Umbra resolution: About 10 centimeters per pixel - Jorgensen cites Umbra’s synthetic aperture radar capability. Axiom station timing: ISS retirement around 2028-2030 - He says Axiom plans to take over high-value ISS components as the ISS retires. Mars cargo timeline: 2029 - He predicts first cargo missions to Mars around this time. Human Mars landing: Around 2033 - His estimate for the first human landing on Mars. SpaceX crew launch milestone: First two U.S. astronauts from U.S. soil in almost a decade - He says this was expected by the end of the month of recording. Investor entry valuation: Usually under $10 million - Typical valuation range when Starbridge first invests. Target revenue streams: Potential $100 million/year - He says some companies entering at low valuations can have very large revenue potential. Fund time horizon: 10 years - He frames VC investing in the space sector around a typical fund duration. Exit expectation: 5–7 years - He says he wants confidence in an exit within this window.

Pivotal Quotes: "I would argue that is one of the worst ways to think about the space industry from an investment point of view. The launch sector is literally less than 2% of the space industry." — Stephen Jorgensen: He is correcting the common misconception that space investing is mostly about rockets and launch providers. "Once you expose living things to microgravity, you get some really, really interesting results." — Stephen Jorgensen: He is explaining why in-space research and manufacturing could unlock major commercial and scientific value. "We really try to focus in on how it connects to the terrestrial market and the broader economy." — Stephen Jorgensen: He is describing Starbridge’s investment thesis: space infrastructure should create value on Earth, not just in orbit.

Implications: Space investing is moving from speculative rockets to a broader infrastructure-and-applications market. For listeners, the opportunities likely lie in enabling technologies, commercial stations, and Earth-facing use cases, with patience and technical diligence essential.