Venture Capital Investments in European Space Startups: an Empirical Analysis of Funds' Specialization and Syndication

The space sector has undergone significant transformations over the past decade, driven by disruptive business models and notable cost reductions, which have facilitated access to space, increased startup activity, and opened a new frontier. This shift, often referred to as the “New Space Economy,” marks a new paradigm in a domain traditionally led by public actors, reflecting the evolution of institutional procurement and the changing role of public space agencies alongside the growing participation of private capital. The sector is structured into two main segments: upstream covers space-system manufacturing and infrastructure; downstream comprises services and applications that use space-derived data. Despite the rapid growth in investment activity, the extent to which investor specialization shapes syndication patterns across these segments remains unclear. The thesis explores the dynamics of investments in European space startups, with particular attention to venture capital (VC) and the syndication practices between 2000 and 2024. Following a literature review on the space sector, VCs, and syndication, the research conducts a systematic mapping of the European space ecosystem, creating a novel dataset covering startups, investors, and financing round characteristics. On these elements, a detailed descriptive analysis is conducted. A new classification method is introduced to distinguish space-focused investors from not-focused ones and leverages the analysis of syndication patterns. Subsequently, econometric analysis applies a two-stage framework to test these patterns: logit models assess whether syndication occurs, while multinomial logit models examine how syndicates form, distinguishing between focused-only, not-focused-only, and complementary investor coalitions. The findings reveal strong heterogeneity in the European space venture ecosystem. Space-focused investors are a minority and tend to engage more in upstream ventures, while not-focused ones, representing the majority, are more involved in downstream rounds. Syndication occurs in about half of the observed funding rounds, indicating that upstream startups display a significantly higher tendency to form syndicates in their rounds compared to downstream ones, net of other conditions. In particular, upstream syndicates more often form complementary investor groups that include both focused and not-focused space venture capital. These results suggest that technical complexity in upstream ventures acts as a structural factor driving mixed syndication. The difference in syndication patterns across segments indicates that this complementarity is strategic rather than random. The many transactions undisclosed in VC are one of the main limitations, and the use of other sources could mitigate the problem but not eliminate it. On the other hand, alternative classification methods could lead to different results. The results matter for startups, investors, and policymakers. A deeper understanding of these dynamics can guide the targeted use of risk-sharing instruments and VC matchmaking, fostering space venture success. Future research should use complementary methods, such as network analysis and studies of investor decision-making, to distinguish mechanisms from other forces and to validate these findings. In parallel, ex post performance analyses of syndicated deals can assess their effectiveness and clarify their role in fostering space ventures.