Countries are racing to expand their spy satellite fleets, as the war in Ukraine forces them to reconsider the intelligence they would rely on in a conflict, the CEO of a space-tech firm told CNBC.
Russia’s full-scale invasion of Ukraine in 2022 marked a “pivotal moment” for the space industry, ICEYE co-founder and CEO Rafal Modrzewski told CNBC on Tuesday.
Europe, as well as Japan, India and Brazil, are now looking to substantially expand their satellite fleets, he said.
The market has “suddenly tenfolded in size,” Modrzewski said, adding that countries increasingly view the technology as critical to securing their sovereignty.
Space, he added, is shifting from a capability that merely supports military operations to “a primary asset that will determine who is going to win or lose.”
Governments build out satellite fleets
European nations’ spending on space rose 12% to 13.5 billion euros in 2025, “mainly due to increased national defence spending,” led by Germany, according to a European Space Agency report published last month.
ICEYE makes radar-imaging satellites that governments can use for surveillance, reconnaissance and intelligence gathering, using a technology called synthetic aperture radar, or SAR.
SAR satellites use radar rather than conventional cameras to image the Earth’s surface, allowing them to collect data at night, through clouds, and during poor weather.
The Finnish-Polish firm raised €450 million in new capital in June at a valuation of more than €10 billion. The total Series F transaction exceeded €1 billion, including secondary share sales, the company said.
The round marked the first investment by the EU’s new Scaleup Europe Fund, the roughly 5-billion-euro initiative established to address Europe’s shortage of growth capital to help promising European technology companies scale.
Modrzewski said access to capital has been one of the hurdles preventing European startups from becoming long-term global leaders capable of competing with U.S. and Chinese rivals.
It comes as Europe’s defense sector is scrambling to build its defense industrial base after years of underinvestment and reliance on U.S. security guarantees that have been called into question under President Donald Trump.
NATO allies last year agreed to spend 5% of GDP on defense and defense-related infrastructure by 2035, as leaders emphasize the growing threat of Russia.
At the same time, wars in Ukraine and Iran have demonstrated the growing role of technologies like drones, artificial intelligence and space-based surveillance in modern warfare.
The challenge of scaling in Europe
Modrzewski said the company is not ruling out an eventual listing on the U.S. Nasdaq, but has not decided when or where it could go public.
He said Europe’s fragmented capital markets could factor into that decision.
“We are clearly a European company working for European sovereignty. We would have loved to be able to list in Europe, but of course there are other considerations,” Modrzewski said.
“It would be interesting to see how this whole situation with stock exchanges evolves,” he said, pointing to efforts to create more unified capital markets across Europe.
Modrzewski described the fragmentation of Europe’s stock exchanges as “a bit of a silly situation” and said he would like to see “one big, highly liquid European Stock Exchange.”
Nasdaq, meanwhile, is a “phenomenal stock exchange,” he said, noting that European companies have successfully listed in the U.S.
Modrzewski said SpaceX’s blockbuster IPO in June reflected strong investor enthusiasm for the space sector and could further broaden the pool of investors interested in other space companies considering public listings.
He added that it was encouraging to see a “massive amount of investors interested in participating in the space race and the future of the space-based architecture.”
