Aalto University: ESA funding for the space business

The European Space Agency’s new innovation programme in Otaniemi helps Finnish companies commercialise inventions, leverage satellite data and strengthen their position in the industry.

When thinking about space technology, spectacular rocket launches, probes exploring the mysteries of outer space, lunar missions, or projects aimed at colonising Mars are probably the first things that come to mind. But for humanity’s survival, monitoring our own planet from space is becoming increasingly important.

Space technology is no longer the exclusive domain of large space agencies like NASA and ESA or corporate giants like SpaceX. Finland’s space era began in 2017 with the launch of Aalto-1, a student-led satellite project. Since then, the country has become home to dozens of space technology companies, such as Iceye and Kuva Space, which have gained international recognition as satellite operators.

‘The space sector in Finland is growing rapidly, and there is still huge potential, particularly in developing data analytics and geospatial technologies,’ says Miika Kostamo, project manager of the newly established ESA Phi-Lab Finland.

This role brings together many of Kostamo’s passions. With a background in land surveying, extensive experience in the geospatial sector, studies in international business, and involvement in a company that expanded into global markets, he sees ESA’s innovation programme as a critical resource for Finnish space entrepreneurs. ‘Now is our chance to make a mark,’ he says.

ESA’s interest signals recognition

Phi-Lab Finland operates out of the Aalto Startup Center accelerator and collaborates with the Finnish Meteorological Institute, the National Land Survey of Finland’s Geospatial Research Institute FGI and the University of Vaasa. ESA BIC Finland, a business incubator supporting space startups, is also a partner.

The innovation funding offered by Phi-Lab can be used for research (30%) but is primarily focused on commercialisation (70%), such as identifying customer needs and acquiring potential clients. The minimum funding amount is €200,000. The programme also provides consulting support, offering 110 hours of expert assistance for research and another 110 hours for business development.

Companies receiving the funding do not have to be startups. Small and medium-sized enterprises (SMEs) must contribute 20% of the project’s financing, while large companies need to cover 50%. ‘In practice, even major corporations can apply for funding from ESA Phi-Lab—there are no age or size restrictions,’ says Kostamo.

To qualify for funding, a company must be based in Finland or demonstrate that the project’s benefits will remain in Finland. This ensures that the funding fosters national space innovation, new business opportunities and the development of expertise.

‘Distributing funding is our key task, but building an ecosystem for the space industry and sharing knowledge is just as essential.’

Bridging knowledge gaps in Finland’s space sector

According to Kostamo, the biggest barrier to growing Finland’s space industry is not a lack of talent but a lack of awareness. Finnish companies have limited understanding of international networks and customer needs, while elsewhere in the world, Finland’s high-quality expertise remains largely unknown.  

‘Many space companies are engineering-driven, so they could benefit more from Aalto’s strengths in design and business.’

Large space organisations like NASA and ESA are not looking for single, isolated solutions but rather surveying the full range of available expertise. ‘We need to be able to communicate that Otaniemi is home to a hundred top AI researchers, quantum computing expertise, geoinformatics specialists and world-class space technology experts. We must present a comprehensive package to potential partners,’ says Kostamo.

Kostamo believes that ESA Phi-Lab is a valuable asset for the entire university. ‘The fact that the European Space Agency has operations in Finland is a brand and communication advantage in itself—it can also attract interest from other potential partners.’