Given that humanity has reached orbit multiple times since the 1960s and 70s, why do so many private companies still struggle with space travel?
The primary challenge has been the cost; historically, launching assets into space was about $20,000 per kilogram. Nowadays, using readily available launch services from SpaceX and others, it's 10 times cheaper. In about five years, with SpaceX's Starship, we expect the cost to drop to $200 per kilogram, making space fully accessible for various business and use cases. This dramatic cost reduction has made space more commercialized and the new level of affordability has sparked global interest, with over 90 space agencies now and thousands of new commercial space start-ups.
The UK and Australia have significantly ramped up their space programs with substantial budgets and strategies; the Middle East has also become active, sending astronauts into orbit through private ventures and investing heavily in space infrastructure.
Countries want space programs for science, industry, and economic benefits since space is a high-performing industrial sector with an economic multiplier of 2.5 times the investment. Venture capital investment in space has been doubling annually, fostering the creation of numerous new companies worldwide.
MDA Space went public in 2021 as a $412 million business and reached $810 million in 2023, effectively doubling in two years.
What were the main contributing factors in driving down the cost of launching assets into space?
The decline in launch costs is primarily due to significant commercial investments and technical advancements, heavily incentivized by NASA, in getting to space with reusable rocketry. Companies like SpaceX have rockets that can be reused multiple times and their Starship will eventually allow for the entire rocket to be recovered and reused. This innovation has transformed launch into a commercial transportation industry, with companies like Rocket Lab contributing to the competitive landscape.
Earlier this year, you announced the rebrand from MDA to MDA Space. What was the motivation behind this?
We've always worked in space, but the market is now large enough for us to concentrate solely on this sector. The rebrand was to emphasize our clear focus and commitment on growing and investing in the global space market. The addition of “Space” to “MDA” also clarifies our identity as a space company to new recruits, investors, and the general public while maintaining a nod to our history and deep space heritage – something that is important to us and to our customers.
Our customers, including satellite operators, large corporations and governments, are key to our growth as they rely on our products, services and investments in next generation technology and manufacturing facilities to meet the moment. To support the development of next-generation space-based networks and digital satellites, we are making significant investments in upgrading and expanding our manufacturing and production facilities.
What are the three main areas of focus for MDA Space going forward into the future?
Our three main areas of focus are directly connected to the three big reasons people look to space. First, Earth and space observation through our geo-intelligence business, building and operating radar-based satellites for climate change monitoring, maritime domain awareness, and defense and security. Using radar satellites, we monitor ice packs, deforestation, and ocean health, contributing valuable data for climate change studies. We also track illegal fishing and illegal immigration, providing critical insights for natural resource management and economic security. The Ukraine war also highlighted the importance of Earth observation for military intelligence.
Second, space-based networks and communications. We build communication satellites, including for low Earth orbit, to provide global broadband, direct-to-device communications, and the Internet of Things. This connectivity impacts billions of people every day, enabling global internet access and supporting industries like agriculture, automotive, and logistics.
Third, living and working in space. With the International Space Station nearing its end of life, new commercial space stations are being developed. These stations will support astronauts, scientific research, manufacturing, and eventually tourism. The emerging economy in low Earth orbit and beyond includes manufacturing unique materials and medical advancements in microgravity, like producing human organs, and in the future, solar power generation and mining in space.
This past summer, MDA Space was awarded $1 billion from the Canadian Space Agency for the next phases of the Canadarm3 program. As the business case improves, what does the government support look like for the space sector in Canada?
As the third country to launch a satellite in space, Canada's historical and ongoing contributions to space remain significant and the Canadian Space Agency continues to provide strong support. As a proportion of government spending, however, Canada is spending less than other countries that are investing in their space programs. The US, UK, Australia, and countries in the Middle East are rapidly increasing their space budgets.
As your demand ramps up, what is the biggest obstacle standing in the way of growth, and how are you combatting it?
Our primary challenge recently has been talent acquisition to keep up with rapid growth. A significant increase in our backlog requires that new hires are well-trained and that knowledge transfer is smooth to maintain our high standards and meet our commitments. We've been successful in bringing in new talent, which is key to operational execution. While our investments in facility expansion, advanced high-volume manufacturing, and productization efforts are helping us scale efficiently, we still require highly-skilled employees to maximize our growth opportunity.
