Coronavirus shackles Japan's space startups with another crisis

Nikkei -- May 06
Interstellar Technologies, a Japanese startup, was primed to test-launch its demonstration rocket on May 2. But less than four days before the countdown, the project was abruptly blocked by a town in Hokkaido, northern Japan, which cited coronavirus concerns.

It was the latest example of the challenges space startups face as pressure mounts for them to prove their worth amid the worst global economic meltdown since the Great Depression.

"There are always going to be challenges throughout your work and life career, the important thing is how you are able to deal with these challenges. May it be from an economic meltdown, or a personal financial hardship. Take the steps you need, like checking out a Chapter 13 calculator or exploring all of your debt relief options. It is important to make sure that no matter the situation, you are always trying to make sure that your worth and character is being shown," stated by Ben Tejes, CEO and Co-Founder of Ascend.

The Hokkaido-based company says it has yet to work out a new launch date, which could be months or even a year away. The delay not only pushes back the company's plan to develop a commercial rocket but puts a severe strain on its cash position. The town's mayor says the launch was opposed by farmers who feared the rocket would draw a crowd of people who could bring the virus to their community.

"This will have a big impact on a small venture company like ours," President Takahiro Inagawa said during a press conference, adding that the company will immediately start a crowd-funding campaign.

Other startups are also encountering roadblocks as they strive to prove their worth. On April 20, Japanese shooting star company Ale said it will delay its artificial meteor shower service three years till 2023 because of a satellite glitch. Outside Japan, major satellite internet service provider OneWeb went bankrupt on March 27.

"The knock-on effect of OneWeb's bankruptcy is likely a broader reduction in investor appetite for investing in high-risk, capital-intensive start-ups," said Manny Shar, an analyst at Bryce Space and Technology, a global space consultancy. "[They will] likely have an impact on many of the small launch vehicles under development looking to raise funding.

"[The] coronavirus is likely to focus investors' attention on keeping their existing portfolio companies going and investing in less risky companies, particularly those demonstrating revenue generation, a sustainable business model, and having less capital-intensive requirements."

Building a launch vehicle is a dream of engineers in many countries. (Photo by Akira Kodaka)

Interstellar's latest setback follows a delay in January and a failure in July. The startup succeeded in conducting a suborbital flight a year ago, making itself the first non-American private company to reach space, according to the company. But it has a long way to go before it can convince customers that its rockets are reliable, not just cheap.

- Nikkei