Public offerings take the stage as the space industry learns from the SPAC boom and bust

The space industry is preparing for an uptick in stock listings, even as the sour legacy of SPAC deals in the sector continues to leave a bad taste in public investors’ mouths.SPACs, or special-purpose acquisition companies, gained popularity a few years ago as a shortcut for private companies to go public by merging with pre-funded, pre-listed shell corporations.While this once-booming trend offered a faster and less scrutinized path to the public markets, many space SPACs ultimately underperformed, weighed down by missed targets and overinflated projections.Now that SPACs have fallen out of favor, IPOs are taking center stage as a wave of growth-oriented space firms enters the spotlight.Just a day after Donald Trump’s Jan. 20 inauguration, U.S.-based space and defense companies Voyager and Karman announced separate plans to go public. More IPO announcements will likely follow, given declining interest rates, strong equity markets, and expectations of a more business-friendly regulatory environment under the Trump administration.“Public markets will be the exit for many of these venture and growth-funded companies that we are seeing raising money in 2024 and 2025,” Anita Antenucci, managing partner of investment bank 3Wire, said Jan. 22 at the Space Foundation’s Finance Forum in Miami.Uncertain exuberanceSpeaking on the same panel, Hoyt Davidson, managing partner at investment bank Near Earth, forecast “a year of uncertain exuberance” for the industry as mounting competition from China’s growing space presence looms.Among the many reasons to be optimistic about the space sector in 2025, he said, especially as it continues on its trajectory toward an often-touted $1 trillion economy, is increasing access to launch services and technological advances that are driving down costs.According to Davidson, some 2,000 space companies worldwide have secured venture capital over the last five years.“Not all of those are going to survive, but we’re starting to see the survivors become more evident,” he added, “and we’re seeing that rationalization. So the next tranche of investors, who write the bigger checks, are starting to focus on these winners, on these survivors, and backing these companies, growing this new economy.”Still, questions remain about how quickly the industry can adapt to the changing dynamics of new space and move beyond the traditional ways it has operated for decades.Lessons from SPACsAs for the much-maligned SPACs, Davidson pointed to similarities with the early dot-com and internet phase around the turn of the century, when a massive influx of investment fueled countless startups, though only 10% to 20% ultimately survived.While this might initially seem like a failure, Davidson noted those companies that did survive became some of the world’s largest and most transformative, driving innovations that have shaped the modern internet and revolutionized industries.Of the dozen or so space companies that went public via SPAC in recent years, four are currently trading above their initial $10-a-share offer price, and Davidson said another two or three are showing promise.“If that’s a 50% success rate,” he quipped, “that’s much better than we did with the dot.com sector.”This article first appeared in the February 2025 issue of SpaceNews Magazine with the title “Connecting the Dots | Catching the next wave.”