Space’s investment case has gone from moonshot to a measure of return, and that was the unmissable message at Disrupt 2025. A threesome of experienced investors — Celeste Ford of Stellar Ventures, Chris Morales of Point72 Ventures and Morgan Beller of NFX — hand-mapped how capital is flowing to the “edge of space,” a fast-growing hemisphere of opportunity from low Earth orbit to cislunar infrastructure going out as far as high-altitude stratospheric platforms.
Why Investors Are Heading to the Edge of Space
Market fundamentals are at last catching up with the hype cycle. And its most recent Space Report puts the size of the commercial space economy last year at some $630 billion, expanding at a high single-digit pace. Launches fill the sky at a record pace: BryceTech tallied more launches than ever in 2023 and that figure has continued rising in 2024, which makes access less of a barrier for startups. Meantime, publicly available rideshare rate cards have dropped per-kilogram prices for smallsats to well below historic levels, compressing on-ramp to orbit and iteration.
That capital efficiency is causing a shift in investor behavior. The panelists stressed that space is no longer hardware — it’s more on the data layer (analytics, tasking and integrating into enterprise workflows) where margins can multiply. Proliferated constellations and stratospheric platforms as edge-computing nodes is a stack that suddenly looks a lot like cloud just before its breakout decade.
What Founders Need to Prove to Secure Funding
Three themes emerged: customer validation, regulatory readiness and unit economics. You can’t expect to fully replace in-person interaction. Founders need more than a demo in a vacuum; they need signed pilots, clear anchor customers and a path to multi-year contracts. Defense is the No. 1 buyer for a lot of firms still. The Space Development Agency’s proliferated LEO architecture and the National Reconnaissance Office purchase of commercial imagery (including its Electro-Optical Commercial Layer awards) are illustrations of scalable demand signals that VCs could underwrite.
Diligence is now a gating item in regulation. Teams must demonstrate proficiency with ITAR/EAR export control, spectrum coordination and licensing processes inclusive of those at the FCC, FAA Part 450 launch safety regulations, and NOAA remote sensing oversight. Investors see exportability and compliance-by-design as competitive advantages that lead to shorter sales cycles as well as less risk around international revenue.
On economics, the bar is getting higher. Morales emphasized that sensitivity analysis would be conducted around launch delays and insurance costs, and that mission models still needed to demonstrate margin reactivity for various cadence assumptions. Ford pointed to capital discipline: pay-by-the-kilogram rideshare, hosted payloads and modular buses can cut initial capex while proving utility. Beller emphasized the leverage of software — usage-based pricing, APIs, and integration partners are all table stakes in any plan claiming data-network effects.
Where the Next Returns in Space Could Come From
People were thinking hard about space domain awareness and debris mitigation. As orbital traffic increases, collision-avoidance services, autonomous maneuvering and verification mechanisms will be essential. Imagine high-fidelity tracking stitched together from optical, radar and RF sources — a textbook dual-use capability that firms and governments both require.
Space-based Earth observation is getting a second act. The synthetic-aperture radar, hyperspectral and RF geolocation players are going beyond pixels to “answers as a service,” feeding insurance pricing, logistics timing and commodities signals. The conflict in Ukraine proved the strategic worth of commercial SAR; investors now want to see repeatable, non-event-driven revenue from sectors such as energy and agriculture.
Another area of interest was in-orbit logistics — refueling, life-extension, and inspection — as satellites turned into assets to be serviced rather than scrapped. Near-space pseudo-satellites provide constant coverage without the need for hundreds of satellites. These low-orbiting satellites provide a unique option to cover disaster response, maritime awareness, and edge connectivity at a fraction of orbital costs!
Dealing With Government Demand And Regulation
The government is still the best source of early revenue, but entrepreneurs are encouraged to think of it as a bridge to diversified markets. Programs such as SBIR and STRATFI/TACFI de-risk technology maturation, and OTA awards from organizations like DIU compress contracting timelines. On the flip side: procurement can take a lot longer than private sales; startups require runway and contracting expertise to clear the valley of death between pilot and program of record.
Regulation-wise, the policy atmosphere is supportive of commercialization generally and almost permissive in some cases — but it’s still not “do whatever.” Investors seek export routes baked into architectural choices, spectrum strategies that are well documented long before build time, and cybersecurity consonant with emerging government benchmarks. In a sector where trust is currency, having a clean compliance posture can mean the difference between scaling and stalling.
What Will Matter for Space Investors This Year
Some of the key metrics cited by panelists include a common scorecard:
- Backlog-to-burn ratio
- Time from contract to on-orbit delivery
- Mission availability (uptime and tasking latency)
- Gross margins by segment (hardware, data, analytics)
- Retention metrics that prove product-market fit beyond a single program
- Proof of supply-chain resilience and second-source options for critical components
Storytelling also must link orbital capability to down-home outcomes — minutes shaved off a shipping route, basis points gained in insurance loss ratios, less downtime for energy operations. Returns are made on the ground, even though the value is in orbit.
Bottom Line for Builders and Operators in Space
The boundary of space is no longer a science project; it’s an investable platform. Prices are dropping, launches are frequent and customers are purchasing. Founders who marry disciplined engineering with believable revenue paths — especially if they weld dual-use demand to software-led margins — will see capital-friendly terms. As Disrupt 2025 described, the winners will be those who consider space an infrastructure layer and create the needful services on that.
