Space investments are taking off with the space economy having shown particular resilience in 2023. Is the space economy worth exploring in the year ahead?

Space Capital Founder and Managing Partner Chad Anderson joins Yahoo Finance Live to weigh in on what areas of the space sector are booming and what investors should consider adding to their portfolios.

Despite a difficult year for startups and fundraising, Anderson notes that satellite companies provide “essential information” for enterprises that are “chasing government dollars.” Anderson believes record revenues in 2023 are a sign of some segments being resilient and counter-cyclical to various trends.

Furthermore, such resilience could pose a “link” to the defense sector in the coming months, due to geopolitical tensions.

With incidents of leaks and valve issues in some spacecraft, most notably on Astrobotic's lunar lander, optimism over moon landings in 2024 has waned. Anderson remains optimistic despite this, noting various investments in lunar companies, stating “there’s going to be a lot of activity going towards the moon in 2024.”

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim.

Video Transcript

RACHELLE AKUFFO: As we look at some of the areas of investment here that have the most upside, heading into 2024 then what stands out to you? I'm looking at some of that M&A activity we saw with Blue Origin.

CHAD ANDERSON: Yeah, well, 2023 was a difficult year for startups and for fundraising for sure. And we are seeing, we're looking-- the space economy has been very resilient actually. And a lot of this is because everyone in this market where enterprise dollars are tight, everyone is chasing government dollars.

And satellite companies are providing essential information, data, and services for enterprises and governments who are willing to buy regardless of market cycles. So in 2023, we actually saw some record revenues for a lot of companies throughout the space economy, which is showing how some of these companies and some of these segments are actually counter-cyclical and resilient. So we expect that to continue into 2024 and beyond as defense becomes inextricably linked between commercial space activities and the geopolitic reality that we live in today.

AKIKO FUJITA: Chad, it's Akiko here. Good to talk to you again. Let's talk about a story that I know you've been following closely.

Even though you said the focus on moon landing is still a small portion of the overall space economy, what's happened with Astrobotic, the lander that was developed by the company which you are an investor in. Certainly hasn't gone as planned because of the propellant link that's happened. There's a lot of investments on this hope of a robust lunar economy and I wonder to what extent you think this could be a big setback in that?

CHAD ANDERSON: Well, it's certainly not ideal. They've been building for the last 16 years to this moment, so it was a real gut punch for the company. This was the first US launch to the moon in over 50 years, government or private. So the fact that they had a valve issue and a fuel leak that's going to prevent them from getting to the lunar surface is certainly not great.

But that being said, the team has done an incredible job of testing systems and maximizing these mission milestones. And you know, we've been lucky actually they've been very transparent and have been sharing these updates as things have progressed. So look, it's the NASA's Artemis program that's underpinning a lot of the growth in the lunar industry. They're committing billions of dollars to build a permanently-crewed outpost on the moon.

And Astrobotic was the first of the Commercial Lunar Payload Services Program, which is the robotic precursor missions to the human Artemis missions. And so NASA has a lot of confidence in this team and their capability, that's why they knew that they were the first company up to deliver on these contracts. And they have trusted them again with another mission later this year to carry a larger, more valuable rover called Viper that's going to go to the south pole and look for resources on the moon.

So there has been $1 billion invested into lunar companies over the last several years. Astrobotic is a leading company in this area. And while this was unfortunate, they have another mission later this year. And we have several other missions, US and international, later this year. So there's going to be a lot of activity going towards the moon in 2024.