When Bulent Altan, an early SpaceX engineer, and Yoram Volklein, a longtime investor, surveyed Europe's space industry in the late 2010s, they were surprised at how similar it was to the beginnings of America's New Space in the early 2000s, when SpaceX and other companies were just getting started.
The two decided to make a personal investment in German launch startup Isar Aerospace, but also considered making a larger investment to more fully capture the huge opportunity to help grow the space sector in both the U.S. and Europe. To do that, they founded Alpine Space Ventures in Munich, Germany, in 2020. Four years and after two years of fundraising, they closed their first fund of $184 million (€170 million), the largest first space-focused venture capital fund in the world.
Their LPs include more than 20 of SpaceX's early employees, as well as major institutions like the European Investment Fund and the NATO Innovation Fund. The fund will fund 10-15 investments (five of which have already been made) with check sizes of up to $5.4 million (€5 million), with significant capital set aside for follow-on rounds. About 70% of the fund is for European companies, but Altan said the company has significant interest on both sides of the Atlantic.
The strong ties to SpaceX are reflected in the company's philosophy, which Altan explained in a recent interview. “We're very resonant with what SpaceX has done and we're investing in it because of it,” he said. “SpaceX pioneered the large satellite sector. […] So if you look at our portfolio, you see that there are component manufacturers, satellite manufacturers and others who benefit from SpaceX. We're staying out of the real long-term stuff and probably staying out of direct competition with the 800-pound gorilla in the room, which is SpaceX.”
Alpine's theory is that as the space industry grows and more non-space companies look to profit from access to space, there will be less need for any given space company to be fully vertically integrated. Instead, a supply chain will develop, similar to the automotive industry. The company believes that communications and Earth observation are the two markets that will drive demand for satellite buses, parts, etc.
Currently, its portfolio consists of five companies (though Voelklein says the company has received nearly 1,000 proposals in the past two years), including K2 Space, a Los Angeles-based startup that has been open about its ambitions to build giant satellites for a Starship-era future, and German satellite builder Reflex Aerospace.
Volklein attributes the thesis to the team's strong technical background. “We're looking at the missing piece of the value chain,” he says. “And that's something that only this kind of team can do.” The engineering focus is clear: Alpine Space's technical director is Catriona Chambers, a seasoned engineer who spent 16 years at SpaceX, where she led Starship's avionics, and its technical advisor is Hans Koenigsmann, who became SpaceX's fourth technical employee in 2002.
Despite its significant advantages, space is a unique sector with unique challenges for venture investment. While many companies promise significant technological safeguards, valuable intellectual property, and enduring physical assets, it is difficult to identify companies that will complete within a typical 10-year funding cycle.
“Matching the technical possibilities with the venture's timeline is the hardest part,” Altan said. “To make it happen, you have to be from the industry and understand where the universe is going. I think that's why we were able to convince investors to stick with us until the end.”
There are aspects of NewSpace that, while standardized by SpaceX and others, still seem odd or downright irresponsible to people — like a rocket exploding in mid-air being hailed as a success, or the first in-orbit demonstration of a new satellite probably having some issues. Part of Alpine's job is to educate both politicians and prospective LPs about the space industry's new attitude of rapid hardware iteration.
Another big hurdle for deep tech investors is the fact that companies often require significant upfront capital. US space startups often use funding vehicles provided by the Department of Defense or NASA to move their technologies from R&D to MVP, while more mature companies (such as SpaceX) benefit from huge contracts that help spur innovation and bring new capabilities to the country. Europe is only just beginning to follow suit, but it is likely to be essential for its own space sector.
“There is a partnership between the United States and Europe and we welcome that partnership, but a good partnership also means being able to bring your capabilities to the negotiating table, and Europe recognizes that,” Altan said.
Altan said the fund's closure took longer than expected, in part due to geopolitical events such as the war in Ukraine and the end of the zero interest rate phenomenon. “But in the end, our target was always €160 million and we exceeded that, so it took longer than we thought it would, but that's also a good thing.”