The City of London has long prided itself on being a hub for financial innovation, but when it comes to the final frontier, we have been late to the launchpad. That perception was rattled this week as a SpaceX co-founder, who was employee number one, offered his reaction to the firm’s long-awaited market debut. Meanwhile, whispers of a UK space sector revival are growing louder, though the numbers remain sobering.
For those of us who cut our teeth on the trading floor, the SpaceX initial public offering is a seminal moment. The company, long a private behemoth, has finally opened its books to public investors. The co-founder, speaking from California, called the float “a validation of the vision,” but his tone carried the weariness of one who has seen the volatility of the sector. “We built rockets, not balance sheets,” he said. “Now the market will decide if our trajectory is sustainable.”
And what a trajectory it has been. SpaceX has disrupted launch costs, pushed the boundaries of reusability, and turned satellite internet into a commercial reality. Yet the market’s reaction has been mixed. Shares popped on day one but quickly settled, a reminder that hype does not pay dividends. The company’s capital structure is complex, with heavy debt and uncertain cash flows from Starlink. For the institutional investors I speak with, the question is not whether space is exciting, but whether the returns justify the risk.
This brings us to the UK’s own ambitions. The government has been talking up a “space industrial strategy” with typical vigour. The Chancellor recently announced tax incentives for space start-ups and a new fund to attract private capital. The pitch is clear: post-Brexit Britain can be a gateway to the cosmos, leveraging our expertise in satellites and financial services. But the markets are sceptical. Gilt yields have ticked higher on the news, reflecting concern that these incentives will add to fiscal strain without delivering a tangible boost.
Let’s look at the numbers. The UK spends roughly 0.07% of GDP on civilian space activities, compared to France’s 0.12%. Private investment in UK space firms last year was just £200 million, a pittance next to the billions flowing into American and Chinese ventures. Capital flight is a real issue. When I see a domestic start-up move its headquarters to Florida or Texas, I do not cheer for globalisation; I wince at the lost opportunity.
The irony is that the UK has the raw ingredients. Our university system produces first-rate engineers. Our legal framework for satellite licensing is robust. And the City remains the world’s second-largest centre for space finance, after New York. But the government cannot simply wish a space industry into existence. It needs patient capital, a stable regulatory environment, and a willingness to tolerate failure. The Treasury, ever focused on the bottom line, will need to decide if it is serious or just grandstanding.
Back to SpaceX: its market debut may ultimately be a lesson in discipline. The company succeeded because it focused on the unit economics of each launch, not the romance of exploration. The UK space sector would do well to remember that. If we can marry our financial expertise with a hard-nosed approach to engineering, we might just have a shot. But if we treat space as a photo opportunity, the market will be unforgiving.
As for the co-founder’s final word: “We are still just lifting off.” For the UK, the countdown has yet to begin.
