By Jaspreet Singh and Akash Sriram

(Reuters) – Global investments in space startups jumped 31% sequentially in the fourth quarter, adding to signs of a rebound in the industry that has benefited from record launch activities and government contracts, according to a report by Space Capital on Tuesday.

The venture capital firm said funding in space companies rose to $4.6 billion in the quarter, taking the total for 2023 to $17.9 billion, after a downturn over the past two years due to high interest rates and economic uncertainty.

The rebound bodes well for 2024, especially as investors pour billions of dollars into space startups.

“Despite a relatively slow start to the year, 2023 investment ultimately was in line with 2022. If the quarterly trajectory continues, 2024 should be a healthy year for investment in space,” Space Capital said.

Italian space logistics startup D-Orbit said last week it had raised more than 100 million euros ($109.37 million) in a late-stage funding round led by Japan’s Marubeni, as it aims to deploy more satellites and bolster services such as space debris clean-up.

About $298 billion has been invested in 1,832 space companies since 2014, according to Space Capital.

Legacy space companies had also more than doubled the number of acquisitions last year, compared to 2022, as they look to build in-house capabilities and competitively position themselves against newer space companies, according to British investment firm Seraphim Space.

“The prospect of declining interest rates is boosting equity valuations and improving LBO (leveraged buyout) math, making M&A more likely in 2024,” Space Capital Managing Partner Chad Anderson said.

(Reporting by Jaspreet Singh and Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)

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