Why UK startups are losing investors

Startup Feature
The satellite startup facing a rocky orbit

Founded in 2015, Open Cosmos has set out to make space more accessible with low-cost satellite solution which offers rapid and affordable access to orbit for governments, businesses, and researchers. With 12 successful launches and £70 million in funding, it has become a key startup in the European space sector. However, without successfully securing new funding it is now facing a rocky orbit and could near bankruptcy.

Reaching for the Stars

Rafel Jorda Siquier, an aerospace engineer and founder of Open Cosmos, created his startup with the intent that accessible satellite technology could solve global challenges. By offering an all-in-one satellite service—covering design, manufacturing, launch, and operations—Open Cosmos has aimed to make this technology accessible for use-cases not only limited to telecom or defense agencies.

The startup has gained recognition for a handful of impactful projects, including partnerships with the European Space Agency (ESA) and the UK Space Agency. Providing satellite solutions for applications such as disaster response, environmental monitoring, and connecting underserved communities.

One of its standout achievements was a partnership with Latin American nations to monitor deforestation in the Amazon. This project showcases its potential to deliver meaningful impact at a fraction of the cost of traditional satellite missions.

Despite its technical successes and growing reputation, Open Cosmos has faced an uphill battle in sustaining its momentum. They are now facing challenges as the UK funding environment has tightened and their cash is running out.

Navigating a Challenging Orbit Without Funding

While Open Cosmos has built a solid foundation of proprietary technology alongside having a list of successful launches, the financial realities of scaling its operations may have caught up with it. Manufacturing satellites and launching missions has demanded significant upfront investment, and by 2024, a lack of cash and the failure to secure new funding has led to cutbacks.

The slowdown and shifting priorities among venture capitalists has hit the space sector hard. To counter these pressures, Open Cosmos has decided to lay off 30% of its workforce across engineering and operations, as well as pushing back their launch dates and avoiding any additional expansion.

With a more uncertain financial market, investors are leaning toward startups with a clear path to profitability without a capital intensive path to product market fit. As such, it seems European space startups such as Open Cosmos will not be able to rely on similar funding expectations to that of previous years.

With a growing strain of balancing ambitious goals with limited financial resources for Open Cosmos, it remains to be seen if they will outlast the dry spell until investors pick up interest for their ambitious plans.