Emerging Australian space companies face challenges securing finance, which limits their ability to compete – opening the door for government to directly invest in the long-term success of Australia’s local space industry, explains Gilmour Space Technologies chief executive Adam Gilmour.
Chinese space start-ups receive vast sums in funding from their government and private sector, and even the most modest of American and European launch companies can get $10 million assistance from their governments.
But for start-ups in the Australian space business, governments provide – not very much.
Australian space entrepreneur Adam Gilmour said a problem in the Australian space business was that there were plenty of people willing to give them a pat on the back but not write a cheque.
He said the Australian government needed to step up and provide the all important seed funding to companies to develop their technology enough to then go out to the market to seek venture capital.
“We are competing against American companies that can get $1 or $2 million from 10 different funding organisations. Of all my rocket competitors, the stingiest of them has got about $10 million from their government,” Gilmour told Space Connect.
“The best have got $30, $40, $50 million from their governments. I have got about $90,000 from my government.”
Gilmour, the founder and chief executive of Gilmour Space Technologies, said he did receive government research and development grants, which was fantastic.
But that wasn’t specifically because his company was in the space business.
“Specific grants to my company have been $90,000 since we started. That’s all from the state government, nothing from the federal government. It’s not even a per cent of the total funds that we have raised,” he said.
“I am not bashing the government. I want to work with the government. The government needs to realise what’s actually going on and step up a bit.”
The government has announced big plans for the growing space sector – to triple in size and contribution to GDP and to create 20,000 more jobs by 2030.
Gilmour said a problem seemed to be that the government saw the space industry as it used to be, where projects cost billions.
“The reality of the new space is that the government isn’t writing big cheques any more. The venture capitalists are. It is step by step. The first cheque is $5 million and then you develop a cool piece of technology and then you get another [$20 million] and then you keep developing that and get another [$30 million]. The venture capital does it all the way,” he said.
“Compared to the other countries, the government is not stepping in to do the seed funding for these companies.”
Gilmour said this didn’t require vast sums of taxpayer money.
“I have been travelling the world for the last five years and going to space conference everywhere and my understanding is that in all the other space companies, governments are seeding money for development of all of these start-ups,” he said.
“It can be $500,000, it can be $1 million. It’s across all kinds of technologies. These companies are then using that money to develop some tech and then go to investors and raise money.”
Gilmour’s suggestion is for the government to start this process soon – seeding at least another five companies over the next three years at a cost of maybe $100 million.
This could even come from existing spending.
“The government spends more than $300 million a year buying data from other foreign satellite operators. If they took a third of that annual spend and said we are going to fund a launch and a company to build us 10 satellites and put our own stuff up, that has multi-years effect,” he said.
“It’s a reallocation of funds. You don’t even have to spend any more money. You just have to reallocate from spending overseas to spending domestically. There is nothing hard about this.”
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