Charter Space raises $5M to bring insurance to the stars

Charter Space, a startup focused on providing insurance for the space industry, has recently secured a $5 million seed round to expand its business. The El Segundo, California-based company, which was a finalist in last year's TechCrunch Startup Battlefield, has already established an insurance brokerage for over 50 companies in the U.S. space and defense industrial base, following the launch of its nationally-licensed brokerage in May.

Insurance-focused venture capital firm Crystal Venture Partners led the investment round, joined by fintech investors QED and Blank Ventures, early-stage venture firm Hustle Fund, and Gaingels, an investment syndicate that supports startups with underrepresented leadership.

The need for space insurance is driven by the frequent issues that arise within the space sector. However, insuring space objects remains uncommon due to the high cost of underwriting. Founder and CEO Yuk Chi Chan explained that regular insurers often become overwhelmed with technical jargon and "freak out" when dealing with space-related risks.

Chan and co-founder Yukun Yin initially aimed to create a centralized software for aerospace engineering, integrating technical, manufacturing, and test data for customers. They soon realized that incorporating this data into the underwriting process could significantly enhance safety and promote global investment. Chan stated, "If we can proliferate insurance coverage, it's good for the space industrial base, providing companies with a safety net.

It also encourages global investment, as companies can access various financial options, including debt and credit, not typically available in other advanced industries."

The space industry, previously dominated by governments and defense contractors, has seen a surge in new players over the past decade, thanks to the reduced costs of launching satellites and spacecraft, primarily driven by SpaceX's Falcon 9 rocket. This growth has led to a greater demand for companies like Charter Space, which aims to build and expand the insurance sector within the industry.

Citing the rapidly growing commercial space economy and the need for a modern approach to risk assessment and insurance, Jonathan Crystal, managing partner of Crystal Venture Partners, emphasized, "Insurance is critical infrastructure for a strong and sustainable space industry, and we believe Charter Space is building the platform that will help the space economy scale safely and sustainably."

Florida's Commissioner of Insurance Regulation, Michael Yaworsky, also highlighted the importance of insurance for space growth, stating that it serves as a prerequisite for expansion and paves the way for increased local investment. He believes that the state that leads in space insurance will become a top destination for capital investment in future industries, contributing to American greatness for the next 250 years and beyond.

With $8 million raised so far, Charter Space plans to use the funds from the seed round to expand its sales organization and enhance its insurance offerings, including coverage for novel mission concepts like space-based nuclear power, lunar missions, and in-space servicing of other spacecraft.