The Ukraine war is forcing countries to rethink the information they rely on in times of conflict, and countries are rushing to expand their reconnaissance satellite fleets, the CEO of a space technology company told CNBC.
Russia’s full-scale invasion of Ukraine in 2022 marked a “pivotal moment” for the space industry, ICEYE co-founder and CEO Rafal Modoshevsky told CNBC on Tuesday.
He said Europe, as well as Japan, India and Brazil, are currently considering significant expansion of their satellite fleets.
The size of the market has “suddenly increased tenfold,” Modrzewskiy said, adding that countries are increasingly seeing the technology as essential to securing their sovereignty.
He added that space is transforming from just the ability to support military operations to a “key asset that determines who wins and who loses.”
Government builds satellite fleet
Spending on space in European countries will rise by 12% to 13.5 billion euros in 2025, “mainly due to increased defense spending” in Germany, according to a report by the European Space Agency released last month.
ICEYE uses a technology called synthetic aperture radar (SAR) to produce radar imaging satellites that governments can use for surveillance, reconnaissance, and intelligence gathering.
SAR satellites use radar rather than traditional cameras to image the Earth’s surface, allowing data to be collected at night, through clouds, and during inclement weather.
The Finnish-Polish company raised €450 million in new capital in June at a valuation of more than €10 billion. According to the company, the total value of the Series F transaction, including the secondary share sale, exceeded 1 billion euros.
The round marks the first investment by the EU’s new Scaling Up Europe Fund, an approximately €5 billion initiative set up to address Europe’s growth capital shortage and help Europe’s promising technology companies scale up.
Modrzewski said access to capital is one of the hurdles preventing European startups from becoming long-term global leaders able to compete with rivals in the United States and China.
This comes as Europe’s defense sector races to build up its defense industrial base after years of underinvestment and a reliance on US security that has been called into question under President Donald Trump.
NATO allies agreed last year to spend 5% of their GDP on defense and defense-related infrastructure by 2035, as leaders highlighted the growing threat from Russia.
At the same time, the wars in Ukraine and Iran demonstrated the growing role of technologies such as drones, artificial intelligence, and space surveillance in modern warfare.
Challenges of scaling up in Europe
Modoszewski said the company has not ruled out an eventual U.S. listing. Nasdaqbut it has not been determined when or where it will be released.
He said Europe’s fragmented capital markets could be factored into that decision.
“We are clearly a European company working for European sovereignty. We would have liked to be listed in Europe, but of course there are other considerations,” Modrzewski said.
“It will be interesting to see how this whole situation with stock exchanges develops,” he said, pointing to efforts to create more unified capital markets across Europe.
Modoszewski described the fragmentation of European stock exchanges as “a bit of a ridiculous situation” and said he would like to see “one big, liquid European stock exchange.”
Meanwhile, Nasdaq is a “phenomenal stock exchange,” he said, noting that European companies have been successful in listing in the United States.
Modoszewski said space x June’s blockbuster IPO reflects strong investor enthusiasm for the space sector and could further expand the pool of investors interested in other space companies considering going public.
He added that it is encouraging that there are “a large number of investors interested in participating in the space race and the future of space-based architecture.”
