Entrepreneurs say regulatory constraints are hampering commercial applications of space tech

When Payam Banazadeh and his team started Capella Space in 2016, they had visions of providing private industry with a wealth of new data that they could use in all sorts of ways to create business opportunities and improve efficiencies.

Four years later, Banazadeh is still waiting for that commercial opportunity.

Capella is still successful. The company has managed to raise $82 million in venture capital financing and has a robust pipeline of government contracts, but Banazadeh has not seen the kinds of uptake in private industry.

He’s not the only one.

Speaking at TC Sessions: Space 2020, Banazadeh was among a number of executives including Peter Platzer, the chief executive officer of Spire Global; Helsinki-based ICEYE’s co-founder and chief executive Rafal Modrzewski; and Melanie Stricklan, the founder and chief strategy officer of Slingshot Aerospace; who spoke about the central role government plays in the current space business and how they’re hoping that will change.

“I think regulation in the US… has made huge improvements this past year. But the challenge is always how do you balance national security concerns with making sure that the US industrial space can keep up with the competition internationally,” Banazadeh said. “I think we need to… in the US… we need to take a leadership position to not just restrict the US companies on following what international companies are doing, but rather allow US companies to go above and beyond and be able to capture more of the commercial market by being able to provide some of the more advanced features [that they have] on the government side.”

Modrzewski agreed.

“When we were starting ICEYE, we were kind of all under the impression that the idea behind new space and things that we are doing, is really to enable the use of observation for the betterment of the world… For improving efficiencies of businesses, monitoring climate change, doing all these things that that that we haven’t been able to do to do before,” he said. “And when I look at basically democratizing data and handing best capabilities available to commercial industries, as well as to the government, ultimately, right, because they are users of the same, the same supply chain. I see that you know, the largest factor that’s currently stopping the evolution is actually national approach to particular sets of activities. I think the the more globally we approach to the market, the broader the competition, the less limitation we impact… It seems to work significantly better for everyone as a global community, if we allow those companies to freely collaborate, and the data exchange to be free. So if there was one wish that I had for 2021, it is to have less borders, and more open markets in terms of exchange of data.”

Governments are, already, massive customers for most of these businesses. In total government spending represents around half of the total $423 billion spent on the space industry already, according to data from Statista.

But if the industry is to achieve the $1 trillion potential revenue that Morgan Stanley projects for businesses in the next 20 years, then more will have to be done to unlock private industry.

“When we started the company, we saw the immediate opportunity in commercial. And as we dug a little deeper and made some progress, we realized that the commercial market is still not as mature as we had hoped it to be. And in the meantime, we quickly found out that the government market, both US government, as well as international governments are expanding and growing much faster than, than before, specifically for this type of data, because of the new challenges and challenges and threats that are that are around the corner,” Banazadeh said. “And so we’ve pivoted and focused on going after governments in catering to their needs… We do want to get back into commercial, we have that aspiration. And that’s our long term goal. We just think that we’re probably a few years out to get there.”

While the commercial market may not have materialized to the degree that these entrepreneurs would have hoped, there are still opportunities for plenty of business from government contracts thanks, in part, to the increasing complexity of operating in space.

That means big business for company’s like Slingshot, which provides what Stricklan calls “situational awareness.”

“Whether that’s in orbit or terrestrially, we provide answers to our customers around their risk and and how to mitigate that risk, or at least how to understand the risk as it pertains to spatial-temporal information,” Stricklan said. “And so right now … their most important asset is their data [and] in order to get that data, they have to have their satellites in orbit, and they have to have safety of flight and all those different things.”

The exploding number of satellites in orbit and the presence of nearly 500,000 pieces of space debris means that operationally these very expensive assets are at greater risk than they were. Slingshot tries to solve that problem by giving its customers orbital awareness of potential risks, and providing ways to process data to understand the terrestrial risks that companies face.

Everyone from insurance companies to logistics providers to financial investors use satellite data and imagery in their decision making process and an increasing driver for all of these businesses is a chance to model out impacts from climate change, according to Platzer.

“I think I think the demand for a global understanding off the planet, to use its resources in an effective and responsible way, is unabated. You know, perspire in particular, you know, the impact of climate change through weather on every single business in every single country, for every single person is certainly not going away. And so that demand is is absolutely increasing,” Platzer said. “So I honestly actually see mostly, almost exclusively opportunities, and not necessarily obstacles, funding in the industry is growing at 46%. year over year. Company creation is growing at 32% year over year. So I think I think it’s really a very, very dynamic period, which is more dominated by opportunities than obstacles I would say.”

Increasingly, startups will be able to meet these opportunities, especially if they can receive a boost from government entities that can highlight the areas that are emerging business opportunities and leave it to private industry to pursue them, Modrzewski said.

Still, the panelists agreed that there’s no better time to start a company focused on the space industry than now.

“If I could encourage those that have any sort of inspiration to start a company around space to do it, just do it. Execute on that, that vision, but understand all of the, the things that we talked about today are different than the risk of say, starting a marketing company or those different things. So be up to the challenge to understand the government as part of this and understand rules and regulations, and outside the government that impact how we fly satellites, how we take care of satellites, how we provide data and understand that there’s a lot of legacy that comes with this industry,” Stricklan said. “I think the global space ecosystem is one that remains heavily siloed. It’s not like the digital transformations that have happened in Silicon Valley. Over the last 10 or 15 years. This industry still needs that digital transformation and so the the world is your oyster, but be prepared and be up for the challenge.”

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Satellite radar startup ICEYE raises 87 million to continue to grow its operational constellation

Finnish startup ICEYE, which has been building out and operating a constellation of Synthetic-Aperture Radar (SAR) small satellites, has raised an $87 million Series C round of financing. This round of funding was led by existing investor True Ventures, and includes participation by OTB Ventures, and it brings the total funding for ICEYE to $152 million since its founding in 2014.

ICEYE has already launched a total of five SAR satellites, and will be launching an addition four later this year, with a plan to add eight more throughout 2021. Its SAR satellites were the first ever small satellites with SAR imaging capabilities, and it designed and built the spacecraft in-house. SAR imaging is innovative because it uses relatively small actual physical antennas, combined with fast motion across a targeted imaging area, to create a much larger synthetic aperture than the physical aperture of the radar antenna itself – which in turn means it’s capable of producing very high-resolution, two- and three-dimensional images of areas and objects.

ICEYE has been able to rack up a number of achievements, including record-setting 0.25 meter resolution for a small SAR satellite, and record turnaround time in terms of capture data delivery, reaching only five minutes from when data begins its downlink connection to ground stations, to actually having processed images available for customers to use on their own systems.

The purpose of this funding is to continue and speed up the growth of the ICEYE satellite constellation, as well as providing round-the-clock customer service operations across the world. ICEYE also hopes to set up U.S.-based manufacturing operations for future spacecraft.

SAR, along with other types of Earth imaging, have actually grown in demand during the ongoing COVID-19 crisis – especially when provided by companies focused on delivering them via lower cost, small satellite operations. That’s in part due to their ability to provide services that supplement inspection and monitoring work that would’ve been done previously in person, or handled via expensive operations including aircraft observation or tasked geosynchronous satellites.

#aerospace, #capella-space, #iceye, #imaging, #recent-funding, #satellite-constellation, #satellites, #science, #spacecraft, #spaceflight, #startups, #tc, #true-ventures

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Rocket Lab returns to flight with a successful launch of a Capella Space satellite

Rocket Lab is back to active launch status after encountering an issue with its last mission that resulted in a loss of the payload. In just over a month, Rocket Lab was able to identify what went wrong with the Electron launch vehicle used on that mission and correct the issue. On Sunday, it successfully launched a Sequoia satellite on behalf of client Capella Space from its New Zealand launch facility.

The “I Can’t Believe It’s Not Optical” mission is Rocket Lab’s 14th Electron launch, and it lifted off from the company’s private pad at 11:05 PM EDT (8:05 PM PDT). The Sequoia satellite is the first in startup Capella Space’s constellation of Synthetic Aperture Radar (SAR) satellites to be available to general customers. When complete, the constellation will provide hourly high-quality imaging of Earth, using radar rather than optical sensors in order to provide accurate imaging regardless of cloud cover and available light.

This launch seems to have gone off exactly as planned, with the Electron successfully lifting off and delivering the Capella Space satellite to its target orbit. Capella had been intending to launch this spacecraft aboard a SpaceX Falcon 9 rocket via a rideshare mission, but after delays to that flight, it changed tack and opted for a dedicated launch with Rocket Lab.

Rocket Lab’s issue with its July 4 launch was a relatively minor one – an electrical system failure that caused the vehicle to simply shut down, as a safety measure. The team’s investigation revealed a component of the system that was not stress-tested as strenuously as it should’ve been, and Rocket Lab immediately instituted a fix for both future and existing in-stock Electron vehicles in order to get back to active flight in as little time as possible.

While Rocket Lab has also been working on a recovery system that will allow it to reuse the booster stage of its Electron for multiple missions, this launch didn’t involve any tests related to that system development. The company still hopes to test recovery of a booster sometime before the end of this year on an upcoming launch.

#aerospace, #capella-space, #electron, #flight, #imaging, #new-zealand, #outer-space, #rocket-lab, #satellite, #science, #space, #spaceflight, #spacex, #tc

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Amazon Web Services launches a dedicated aerospace and satellite business

Amazon Web Services (AWS) is upping its space industry game with a dedicated business unit called Aerospace and Satellite Solutions (as first reported by the WSJ) that’s focused on space projects, including from customers like NASA, the U.S. military, and private space players including Lockheed Martin and others. AWS has already served satellite and space industry customers, including with its AWS Ground Station offering, which provides satellite communication and data processing as a service, helping customers bypass the need to set up their own dedicated ground stations when establishing their satellite networks and constellations.

The AWS segment will be led by retired Air Force Major General Glint Crosier, who was involved in the set up of the U.S. Space Force arm of the U.S. military. The choice of leadership is a good indicator of what the primary purpose of this unit will be: landing and serving large, lucrative customers mostly form the defense industry.

In a high-profile decision last year, AWS lost out on contract to provide cloud computing services to the Pentagon with an estimated value of up to $10 billion, with Microsoft’s Azure taking the win. Amazon has formally challenged the decision, and the proceedings resulting from that challenge are ongoing. But the contract loss was likely a wake-up call at AWS that it would need to do more in order to bolster its pipeline for dedicated defense agency contracts.

Cloud computing services for satellite and in-space assets is a potentially massive business over the next few years for the defense industry, particularly in the U.S., where part of the strategy of the Space Force and Department of Defense is shifting away from a reliance on large, aging geostationary satellites, and towards more versatile, affordable and redundant networks of small satellites that can be launched frequently and in a responsive manner.

A primary focus on defense customers doesn’t mean startups and smaller new space ventures won’t benefit; in fact, they should be just as able to take advantage of the cost benefits that will accrue from Amazon dedicated more resources to serving this segment as bigger players. In fact, AWS Ground Station already serves smaller startups including Capella Space, which announced today that it would be using AWS for its satellite command and control, as well as for providing data from its imaging satellites to its customers much faster and cheaper than is usually possible for satellite providers.

This new focus could help further defray hard costs that any satellite startup must incur like ground station setup – a much-needed relief as the COVID-19 situation continues to impact startups’ ability to raise, especially in frontier tech areas like space.

#aerospace, #amazon, #aws, #capella-space, #cloud, #defense, #department-of-defense, #space, #space-force, #tc

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Belvo scores $10M from Founders Fund and Kaszek to scale its API for financial services

Belvo, a Latin American fintech startup which launched just 12 months ago, has already snagged funding from two of the biggest names in North and South American venture capital.

The company is aiming to expand the reach of its service that connects mobile applications in Mexico and Colombia to a customer’s banking information and now has some deep-pocketed investors to support its efforts. 

If the business model sounds familiar, that’s because it is. Belvo is borrowing a page from the Plaid playbook. It’s a strategy that ultimately netted the U.S. startup and its investors $5.3 billion when it was acquired by Visa in January of this year.

Belvo and its backers, who funneled $10 million into the year-old company, want to replicate Plaid’s success and open up an entire new range of financial services companies in Latin America.  

The round was co-led by Silicon Valley’s Founders Fund and Argentina’s Kaszek. With the new arsenal of capital complimented by the Founders Fund’s network and Kaszek’s deep knowledge of the Latin American market, Belvo hopes to triple its current team of 25 that is spread across operations in Mexico City and Barcelona. 

Since its initial establishment in May 2019, the company has raised a total of $13 million from Y Combinator (W20) along with some of the biggest players in Latin America’s startup scene. Those investors include David Velez, the co-founder of Brazil’s multi-billion dollar lending startup, Nubank; MAYA Capital and Venture Friends. 

The company’s co-founders, Pablo Viguera and Oriol Tintoré are no stranger to startups themselves. Viguera served as COO at European payments app Verse, and is a former general manager of one of the big European neo-banks, Revolut. Tintoré is a former NASA aerospace engineer, and while working for his Stanford MBA, founded Capella Space, an information collection startup that went on to raise over $50 million. 

The company said it aims to work with leading fintechs in Latin America, spanning across verticals like the neobanks, credit providers and personal finance products Latin Americans use every day.

Belvo has built a developer-first API platform that can be used to access and interpret end-user financial data to build better, more efficient and more inclusive financial products in Latin America. Developers of popular neobank apps, credit providers and personal finance tools use Belvo’s API to connect bank accounts to their apps to unlock the power of open banking.

Viguera says the capital will be used to open a new office in Sao Paulo, and invest in new product and business development hires. Notably, Belvo is only one year old, having launched in January 2020 and operative in Mexico and Colombia. 

Co-founders Pablo Viguera and Oriol Tintoré are a former Revolut GM and former NASA aerospace engineer.

 

Belvo’s latest funding also marks another instance of a U.S.-Latin America investment teamup for a Latin American company.

Nuvocargo, a logistics startup that wants to bolster the Mexico – U.S. trade lane with its freight transportation technology, also recently raised a round co-led by Mexico’s ALLVP and Silicon Valley-based NFX. American investors may be starting to take note of the co-investment opportunity of putting capital into startups serving the Latin American market in partnership with successful new wave domestic funds like Mexico’s ALLVP and Argentina’s Kaszek.  

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