TAMPA, Florida – Non-venture investment in space startups reached its highest level last year following a 2021 spike driven by a wave of special purpose acquisition company (SPAC) mergers, according to BryceTech analysis.
Fletcher Franklin, deputy director of analytics at BryceTech, said 2025 was likely the largest period of non-venture investment in space startups on record, when, with the exception of SPACs, cash-rich shell companies were offering startups fast-track to the public market.
The firm defines startup space companies as those that primarily serve the upstream and midstream segments of the industry, and were angel or venture-backed at the time of inception. Its preliminary data shows that total startup investment is expected to increase by about 22% year-on-year to about $10 billion in 2025 due to a greater reliance on traditional initial public offerings (IPOs) and debt financing.
“The increase in non-venture funding in 2025 appears to be a sign of the industry maturing,” Franklin said, although there were other prevailing positive conditions for going public, such as high investor sentiment in defense tech.
US companies are set to account for more than two-thirds of total investment in 2025 amid expectations of growing national security demand for commercial space capabilities, including military communications, intelligence and surveillance.
A large portion of the market is still heavily dependent on venture capital for growth. Traditional private equity buyouts and wholesale acquisitions of startups are also limited in the space industry, with these institutional investors preferring to invest through venture deals.
“What was surprising to us was that the volume of venture investment in dollar terms was not down year-over-year,” Franklin said, adding that it had increased from $7.3 billion to $8.6 billion.
“So, we don’t think there will be a comeback, given the increase in other fundraising mechanisms last year, mainly some of the larger IPOs.”
industry maturity
According to the data, Launch was the largest recipient of non-venture investment, largely due to Firefly’s IPO.
“The startup space companies coming to market in 2025 were more mature and internally diverse than some of them during the 2021 SPAC wave,” Franklin said, noting investors’ growing appetite for firms poised to take advantage of growing defense technology opportunities.
Preliminary findings also show that as the industry matures, companies across the sector are increasingly leaning on debt, helping them grow capital-intensive businesses without diluting shareholder interests, according to renowned BryceTech analyst and lead report author Ryan Puleo.
BryceTech expects at least one major IPO in 2026 with SpaceX, following some large venture deals that have already closed this year.
The company is expected to finalize its annual report on the health of the space startup market later this month.
