Charter Space has raised a $5 million seed round to expand its space insurance brokerage, the El Segundo, California-based startup announced Wednesday. The company said it is already serving more than 50 companies across the U.S. space and defense industrial base, following the May launch of its nationally licensed brokerage.
Crystal Venture Partners, which focuses on insurance, led the round. Fintech investors QED and Blank Ventures, early-stage venture firm Hustle Fund, and Gaingels, a syndicate that backs startups with underrepresented leadership, also took part.
Charter Space was a finalist in last year's TechCrunch Startup Battlefield. Founder and CEO Yuk Chi Chan started the company with co-founder Yukun Yin with the goal of building centralized software for aerospace engineering, pulling together customers' technical, manufacturing, and test data. Chan later saw value in feeding that data into the underwriting process.
Chan has said the high cost of underwriting items such as satellites helps explain why insuring objects sent to space remains uncommon. He has argued that broadening insurance coverage would give more space companies a safety net and encourage investment from sources beyond venture capital and growth equity, including debt and credit.
The space industry was long dominated by governments and defense contractors that moved slowly and conservatively after the Cold War, leaving space companies with few financial services options. The rise of new space companies over the past decade, driven in large part by SpaceX's Falcon 9 lowering launch costs, has created enough demand for businesses like Charter Space to grow. New satellite and spacecraft makers and new launch providers are competing to fill the gap SpaceX is expected to leave when it retires the Falcon 9.
Jonathan Crystal, managing partner of Crystal Venture Partners, said in a statement that Charter Space sits between the growth of the commercial space economy and the need for a modern way to understand and insure the risks that come with it. He described insurance as critical infrastructure for a strong, sustainable space industry.
Michael Yaworsky, Florida's commissioner of insurance regulation, said in a statement to TechCrunch that insurance is a precondition for growth in space and opens the door to more local investment. Florida remains the leading launch location in the country.
Charter Space has raised $8 million to date. It said the seed proceeds will go toward growing its sales organization and its insurance offerings, including possible coverage for novel mission concepts such as space-based nuclear power, lunar missions, and in-space servicing of other spacecraft.
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