What incentives for VCs to invest in Space-tech oriented startups: Primo-capital’s POV

Once considered too costly, too complex, and too risky for private capital, the space industry has undergone a fundamental transformation. What was once a government-dominated arena is now increasingly led by commercial actors, driven by falling launch costs, technological breakthroughs, and a surge in entrepreneurial activity. The result has been rapid market expansion, new revenue models across upstream and downstream applications, and a sharp rise in private space investment. This shift presents a significant opportunity for European venture capitals to close the funding gap and accelerate the continent’s role in the emerging space economy. To better understand the dynamics behind this evolution, we spoke with Raffaele Mauro, co-founder of Primo Space in Italy: a VC fund dedicated to deep-tech innovation with a particular focus on space technologies. Why Space, Why Now? Before diving into the specifics, it is important to recognize that the space industry extends far beyond satellites, launch systems, navigation and telecommunications. It also encompasses companies developing advanced materials, software for space operations, and businesses applying space-generated data such as Earth observation. According to the specialist, part of the momentum behind space tech investment stems from a long-standing fascination with a field that is inherently multidisciplinary. Within space, multiple domains make their way to the surface: from telecommunications and agriculture to environmental monitoring, 3D printing, artificial intelligence, and advanced manufacturing. The other driving force is the sector’s rapid acceleration. Indeed, space tech has become a booming, innovation-rich market where venture capital sees strong potential for growth. In Europe in particular, investors identified a clear funding gap, especially after the European Space Agency and the Italian Space Agency signalled, through their multi-year industrial plans, a strategic shift toward the commercialization of space technologies. This is precisely the opportunity that the founders of Primo Capital recognized and successfully positioned themselves to capture. This shift in perception set the stage for a broader realization: space isn’t one industry, but a platform enabling dozens of others. Space isn’t one industry As Raffaele observed, “space is more an environment where you can do things, rather than a specific industry.” That simple phrase captures a core truth: the “space economy” is not monolithic. It spans hardware-heavy upstream operations (rockets, satellites, launchers, components) and software/data-focused downstream ventures that build services on top of that infrastructure. This duality changes what success looks like. In upstream startups, the key milestones are technical: engineering robustness, environmental qualification, and proof of viability under space conditions. Downstream companies, by contrast, operate more like traditional tech/SaaS firms: their success is measured through commercial traction, sales cycles, and recurring demand. Primo Space’s portfolio makes this split concrete. D-Orbit, one of the fund’s most visible investments, is a textbook upstream play. The Italian company is building a full space-logistics infrastructure, using its ION orbital transfer vehicles to deploy satellites in precise orbits and then provide in-orbit services and end of life management. On the other side we have Eoliann; a startup that uses satellite data and artificial intelligence to forecast the probability, intensity and impact of climate-related disasters, providing climate-risk metrics to banks, insurers and infrastructure owners. The consequence of this division? Well, as Raffaele put it, “not all segments of the space economy are capital intensive.” This means that while some ventures require heavy investment and long development cycles, others can scale more lightly, making space accessible to both deep-tech engineers and software entrepreneurs. Because these segments operate under fundamentally different dynamics, what VCs measure, and how they evaluate success, also diverges. This brings us to the KPIs that matter most in space tech.