WASHINGTON: US federal budget cuts have started to have some early impact on space startups after funding for such companies dropped 12.5 per cent in the first quarter, according to investment firm Seraphim Space.

Elon Musk-led Department of Government Efficiency and the Trump administration have been delaying or cancelling contracts across its agencies to curb federal spending.

`Within certain government departments, uncertainty is causing delays as they assess which con-tracts to move forward with,` Seraphim Space analyst Lucas Bishop said.

Space startups which garnered $2.1 billion in investments in the first quarter have largely relied on government contracts over the past few years as rising geopolitical tensions led to a surge in demand for imaging and analytics.

Following strong stock performance of space companies, Voyager Space filed to go public in January, while Karman Holdings listed in February.-Reuters