Oct 10 (Reuters) - Space startups raised $1.9 billion in

the third quarter, up nearly a fifth from a year earlier, fueled

by strong investor interest in rocket launchers and satellite

manufacturers, according to a Seraphim Space report on Thursday.

This marks a shift in investment trend, as nine of the top

ten space sector deals in the third quarter were for

capital-intensive businesses, the report said.

Venture capital firms and other investors had previously

focused largely on data analytics and satellite imagery-related

startups in the space sector as they bear a quicker path to

generating revenue than businesses such as rocket makers and

hardware suppliers which require heavy capital investment.

"As the activity and investment opportunities in space

continue to grow, we need businesses capable of meeting demand

for satellite launches," said Lucas Bishop, Investment Associate

at Seraphim Space.

Funding in the third quarter was up 18% from a year earlier

at $1.9 billion, with an average deal size of $18 million,

according to the report.

The largest transaction of the three-month period to Sept.

30 was for World Labs, a geospatial intelligence firm, which

raised $230 million from a host of high-profile investors

including Nobel Prize-winner Geoffrey Hinton, Nvidia ( NVDA ),

AMD and Adobe.

The United States overtook China in space startups funding

so far this year, the report said. It anticipates competition

for dominance in space to drive further investment.