Investing in Orbit: the rise of Europe’s space economy

Private investment in European space start-ups has surged, driving new business models and commercial opportunities across industries. To understand what’s driving this momentum – and where the strongest growth potential lies – we spoke with Christine Klein, Head of Industrial Policy and Auditing. at the European Space Agency (ESA).

The scale and strategic importance of space commercialization have grown dramatically. For example, in 2024, private investment in European space start-ups reached about 1.5 billion euros - 10 times more than a decade ago. This surge is reshaping Europe’s space ecosystem, with a dynamic mix of start-ups and SMEs joining established industry leaders. Employment is rising too, with roughly 15,000 full-time jobs now in these smaller companies.

The relevance for Europe is clear: space is becoming an essential infrastructure for our daily lives, enabling navigation, communication, and weather forecasting. Without it, our modern society would be fundamentally disrupted.

The most commercially viable areas are downstream applications like satellite communications and Earth observation, where data services support industries such as maritime and automotive. We also see strong growth potential in emerging markets like in-orbit servicing (extending the life or functionalities of spacecraft that are already in orbit), manufacturing, and debris removal.

We aim to develop a system for transporting cargo to and from orbit, opening new commercial opportunities for the future.

Initiatives such as the European Launcher Challenge and the LEO Cargo Return Service are designed to foster the creation of new markets. With the LEO Cargo Return Service, we aim to develop a system for transporting cargo to and from orbit, opening new commercial opportunities for the future.

Traditionally, banks and investors have found it challenging to assess and finance space projects due to the sector’s niche nature and inherent risks, especially for SMEs. However, the sector’s growing strategic importance – particularly in security – may help mitigate these barriers. ESA addresses this through the ESA Investor Network, which brings together institutional investors and major banks – including Deutsche Bank as a key partner – to improve risk understanding and deal flow.

In parallel, ESA works with the European Commission and the European Investment Bank to establish dedicated funding lines and risk-sharing instruments, while providing technical due diligence and ecosystem insights. As space gains strategic relevance, particularly for security, investors should also factor in political trends and growing demand from dual-use applications and large constellations.

Europe has developed some of the world’s best-performing space systems, like Copernicus for Earth observation and Galileo for navigation, which are considered state-of-the-art. Our strengths include highly skilled engineers, companies, and scientists. However, we lag in speed and scale of investment and face a fragmented landscape in Europe. Efforts are underway to harmonize requirements and co-funding levels, making it easier for SMEs and start-ups to participate.

Sustainability is essential for ESA. We want space to remain a safe, accessible, and sustainable domain for generations to come. ESA was the first space organization to systematically monitor the environmental impact of its missions. Our Green Agenda aligns with the European Green Deal and the Paris Climate Agreement, guiding efforts to reduce our environmental footprint and promote green technologies.

We want space to remain a safe, accessible, and sustainable domain for generations to come.

We aim for zero new space debris by 2030 and have established the Zero Debris Charter, signed by 21 states and 180 industrial actors. Leadership in sustainability can become a competitive advantage for European industry.

ESA’s motivation is to ensure Europe remains competitive and resilient in the global space economy. Commercialization is now a core strategic priority for us. We’ve streamlined our contracting processes and lowered entry barriers, especially for SMEs and startups. For instance, we’ve halved the time it takes to finalize contracts under 1 million euros, making it easier for new players to participate. Our policies actively encourage SME involvement, fostering a more agile and competitive market.

This page was published in February 2026.