Investors are bracing for a surge in defense-related funding as the new Trump administration is expected to further fuel the growth of the space industry.

Mark Boggett, CEO and managing partner at Seraphim, a UK-based space investment firm, expressed confidence on Nov. 20 during the Deutsche Bank Global Space Summit in New York that the incoming administration would attract more capital into the space market. "It will bring more investment into the space sector," Boggett stated.

He noted that Trump's recent re-election has brought greater clarity regarding both immediate and long-term defense budgets, which will significantly support space-related ventures. Reflecting on the previous administration's approach, Boggett pointed out that Trump had pushed NATO allies to increase their defense spending, with many European countries committing additional funding. However, he believes that the current global environment demands even more from them. "They'll have to commit more — likely doubling their contributions," he suggested.

In addition to this defense budget shift, Tony Kim, managing director at BlackRock, emphasized the potential for regulatory changes under the new administration. Efforts to streamline processes at agencies such as the Federal Communications Commission and Federal Aviation Administration could ease deal-making for space companies. "Some companies will benefit more than others, especially those with closer ties to the administration," Kim noted, though he stopped short of explicitly naming SpaceX CEO Elon Musk, a key Trump supporter.

Carl Sjolund, partner at Swedish private equity firm EQT, offered a more cautious outlook, acknowledging that defense investments were already on an upward trajectory due to rising geopolitical tensions, particularly following Russia's invasion of Ukraine. Sjolund also mentioned the EU's ongoing multibillion-dollar investment in sovereign broadband constellations, suggesting that Europe will continue its commitment to space despite the shift in U.S. leadership.

Boggett pointed out that while European space investments have made strides, particularly in early-stage companies, there remains a significant gap in later-stage funding. "This gap in Europe is still considerable, and I don’t see much government intervention on the horizon to address it," he remarked. As a result, European companies that succeed in early funding rounds are likely to become attractive targets for U.S. investors.

He predicted that the change in U.S. leadership would likely accelerate mergers and acquisitions in the sector. "M&A activity is set to increase as a result of the leadership shift," Boggett said.

Adding another layer to the global competition, Seraphim's research reveals that China has outpaced the U.S. in space investments this year. "This is the first time we've seen China surpass the U.S. in space funding," Boggett highlighted, underscoring the intensifying competition in space exploration and technology development.