Shares of Innospace, a South Korean space launch startup listed on the KOSDAQ on July 2, have plummeted by nearly 50% within three weeks compared to their peak price on the first trading day. Innospace, recognized for its technical prowess after successfully launching its self-developed test launch vehicle ‘Hanbit-TLV’ in March last year, entered the stock market through a technology special listing earlier this month. The company aims for its first commercial launch by March next year, with a revenue target of 97.2 billion won by 2026.
However, the lack of a clear revenue model has been a significant obstacle. Innospace reported a revenue of 231 million won, and an operating loss of 16 billion won last year. The company recorded zero revenue in the first quarter of this year. On July 24, Innospace’s stock closed at 25,600 won, down approximately 25% from its closing price of 34,450 won on the first trading day. A company representative said, “We are discussing several contracts, but none have translated into actual revenue yet. We expect to see significant results by this year’s end.”
The rise of the “New Space” era, where private companies play a central role, is challenging South Korean space firms, which have yet to achieve notable results. The space industry requires substantial financial investment but rarely yields quick, visible returns. Despite recognized technical skills, the path to profitability can be long, necessitating capital raised through initial public offerings (IPOs). This often leads to a vicious cycle where disappointing earnings suppress stock prices. The space industry’s winner-takes-all nature is an additional burden for Korean space startups.
An aerospace industry insider said, “To expand the base of the Korean aerospace industry, policies are needed to help capable companies cross the ‘valley of death.’”
Established last May, the South Korean Space Agency emphasizes that the government should focus on high-risk and long-term development projects while the private sector leads space development. Following this trend, more Korean space companies are eyeing public listings. After Contec, a satellite data startup, went public last November, Innospace followed suit earlier this month. Lumir, which develops microsatellites, recently passed a preliminary screening for listing on the Korea Exchange. Other companies, such as launch vehicle developer Perigee Aerospace and microsatellite firm Nara Space, also aim to go public this year.
However, these companies still face significant revenue or stable profits challenges. While they possess the necessary technology, they have not yet reached the stage of successful commercialization. For instance, Perigee Aerospace initially planned a test launch of its vehicle off the coast of Jeju in the first half of this year but postponed it to the second half. The test launch has been delayed to early August due to continued final preparation work. Contec’s stock, which went public on KOSDAQ last year, closed at 12,530 won on July 24, about half its offering price of 22,500 won.
Even in the United States and Europe, many space companies struggle to secure profitability, leading to bankruptcies or delistings. Apart from dominant players like SpaceX, which has monopolized reusable rocket technology, and Blue Origin, founded by Amazon’s Jeff Bezos, few companies generate sufficient profits. Compared to other industries, the high costs of rocket launches and satellite development contribute to a market structure where leading firms dominate.
