The space industry is growing. Here are two areas to consider for your portfolio: Investor

Key Points
  • The space industry is estimated at $339 billion and expected to grow to $1 trillion.
  • "Space is the hottest sector right now," says Dylan Taylor, founding partner at Space Angels Network.
  • Two categories to watch are launch, and data or Earth observation.
Space Angels co-founder discusses space investment, tech valuations

Space is a booming business — and it's only going to get bigger, said Dylan Taylor, founding partner at Space Angels, a privately held financial services firm that focuses exclusively on the aerospace industry.

"Space is the hottest sector right now," Taylor told CNBC's Morgan Brennan during an exclusive interview on Tuesday at the 34th Space Symposium in Colorado Springs, Colorado. The event is the largest gathering of space professionals on Earth, with more than 9,000 people expected to attend.

And the industry — right now valued around $339 billion — is expected to grow to $1 trillion.

"If you look at internet of things, if you look at driverless cars, if you look at connecting the next 2 billion people to the internet, that is all enabled by space," Taylor said on "Power Lunch" on Tuesday. "And certainly, collecting data from space, creating products and services around that, that's a huge investment thesis as well."

Two categories Taylor recommended for investors looking to get into the space sector are launch, and data or Earth observation.

Taylor, who has invested in more than 40 space ventures, recommended companies such as SpaceX and Vector Launch for investing in the category of launch, or "actually getting mass to orbit."

The category of data or Earth observation includes things such as optical and infrared imagery of the Earth. "Creating products and services to enable smart cities, the internet of things, driverless cars and things like that," Taylor said.

But investing in the unknown is not for the faint of heart, Taylor said. He recommends finding a firm that specializes in early-stage investing or an angel investment group, like his own, that understands the industry.