SMBC Invests in Interstellar Technologies
Sumitomo Mitsui Banking Corporation (SMBC) has made an investment in Interstellar Technologies (IST), a startup company aiming for vertical integration of rocket and communications satellite businesses, and has simultaneously concluded a business partnership agreement with IST regarding support for supply chain construction in the space-related industry. This marks SMBC's first investment in a space-related startup company.
The space industry is experiencing growing demand across various industrial sectors that would be difficult to realize with traditional ground-based infrastructure businesses, such as autonomous driving technology utilizing satellite data and smart agriculture. The market is expanding not only in traditional government-centered business but also in private-sector-led markets. The Japanese government has also strengthened its support in the "Basic Plan for Space Policy" to double the space industry market size from 4.0 trillion yen in 2020 to 8.0 trillion yen by the early 2030s, making it a growth industry for Japan's future economy.
In particular, rocket launches are becoming increasingly important as infrastructure supporting other areas within the space industry, such as satellite data utilization and space exploration. This is also an area where Japanese industry's internationally competitive technologies, such as internal combustion engines, have significant potential for application. While interest from private companies in non-space industries is growing, private operators in Japan aiming for rocket manufacturing and launches remain limited, and the supply chain supporting high-frequency rocket manufacturing is still immature. Consequently, transportation of artificial satellites to space currently depends heavily on overseas private operators.
Under these circumstances, to establish rocket manufacturing and launch capabilities of several dozen units annually in Japan and make the space business a key industry for Japan, it is necessary for not only startup companies responsible for rocket manufacturing and launches, but also large corporations, medium and small enterprises, and local governments to work together to promote demand creation and supply capacity expansion for private rocket launches.
Sumitomo Mitsui Financial Group has positioned "creation of social value" as one of the pillars of management in its current medium-term business plan, and has defined "Japan's regrowth" as one of the priority issues to be actively addressed. The group has also established a "Social Value Creation Investment Framework" as one of the mechanisms to support business co-creation and development with customers that contribute to social value creation, as well as the development of new technologies and industries through risk-taking.
IST is a leading company in domestic private space transportation, being the first private company in Japan to achieve space reach independently. The company is developing the small satellite launch rocket ZERO, aiming for early realization of Japan's first vertically integrated business combining rocket and communications satellite operations.
To contribute to Japan's regrowth through support for new industry development, SMBC has utilized the Social Value Creation Investment Framework to invest in IST and concluded a business partnership agreement regarding support for supply chain construction in the space-related industry.
By leveraging SMBC's customer base and financial solutions, and further accelerating the supply chain construction and industrial clustering that IST is pursuing through its technological development capabilities, we will support the development of the space industry in Japan.
Norbert Gehrke
