The Space Investment Community is Just Getting Started with Startups

June 2018 CDL Insights chat with Chris Hadfield, Firouz M. Naderi, Anousheh Ansari and Dante Lauretta. Credit: Creative Destruction Lab.

The space investment community is paying attention to Toronto’s Creative Destruction Labs (CDL) space stream which just completed its second session last week.

Last week CDL held the second session of its inaugural space stream with each company working hard to impress mentors in the hopes of making it to the third session. This is the impression SpaceQ received in talking to some of the participating companies. In an email to SpaceQ, CDL however says that “our ventures work hard not to impress our mentors, but to complete objectives solely for the sake of keeping their business alive and scaling quickly – gaining mentor interest is a byproduct of this.”

It’s unclear how many companies have made it to the third session of the space stream, but at least one team compared the experience to a reality show like Survivor.

CDL isn’t releasing information on which companies makes it to each subsequent session so as not to discourage or impact those companies that don’t make it as they go forward in trying to build their businesses. There are many factors that might lead a company being dropped.

The value of the space stream is not just in graduating. Even if a team does not make it to the next session SpaceQ has been told by teams participating that the interactions with mentors, the process and the knowledge gained is valuable.

SpaceQ has learned that 27 companies were selected for the first stream. Of those, a quarter of the companies come from Canada with the majority coming from the U.S. along with a few from Europe and one from India.

CDL will release the companies who graduate and list them as “alumni” once the inaugural space stream is over next June. For those who don’t make it to the end, their names aren’t mentioned. CDL currently lists alumni in six verticals* from their current eight streams which include Artificial Intelligence (AI), Blockchain-AI, Cities, Energy, Health, Quantum (Machine Learning), Prime (General), and Space.

CDL is trying to positioning itself as the go to international destination for foreign companies to be mentored in specific areas. It’s a commitment startups are willing to take on if they find the experience valuable. As this is the first space stream by CDL, the pressure is on to create a first group of alumni that will showcase what CDL can do for these companies.

Each stream is different, but it could be reasonable to guess that maybe only a quarter of the teams will graduate and become alumni.

Chad Anderson, CEO Space Angels on BNN Bloomberg, Dec. 13, 2018.

The investors

One of the reason teams participate is the opportunity to make contacts with the investment community. One of the mentors for the space stream is Chad Anderson, CEO of the U.S. based Space Angels.

Space Angels has 250 investors as part of its group with a wait list of those wanting to join. Space Angels is now making about 10-12 deals a year. Canadian companies that have received investments from Space Angels include GHGSat, SkyWatch and Kepler Communications.

For Anderson, being a mentor affords him the opportunity to help out the companies in the space stream and scope out potential investments Space Angels might make in the future. It’s definitely a win-win for all those involved.

One important point to make is that the investment community is just getting started with startups. Space Angels itself is just over a decade old and it’s only in the last four years things have really started to pick up.

CDL may be the first larger player in Canada to move forward with a space stream, but it won’t be the last. You can count on others joining including some which may be focused primarily on Canadian startups.

If you’re in university and itching to startup a new space company upon graduation, there’s been no better time than now.

(*) Updated at 4:30 p.m. EST with corrected list of streams and verticals of alumni.

About Marc Boucher

Marc Boucher
Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceQ Media Inc. and CEO and co-founder of SpaceRef Interactice Inc. Boucher has 18 years working in various roles in the space industry and a total of 25 years as a technology entrepreneur including creating Maple Square, Canada's first internet directory and search engine.