NSR Addresses the Butterfly Effect on Smallsats from Starlink’s IPO or is it a Caterpillar?

SpaceX has now launched 242 of the 42,000 total satellites planned for the Starlink constellation, according to their latest filing and it is the largest commercial satellite constellation operating in history, despite having a mere 0.6% of the total in orbit. As a first mover and largest system in the satcom business, Starlink’s future is bound to have a butterfly effect on the rest of the small satellite market by influencing investors’ interest in other missions.

Flap Your Wings

Much like the chaos theory where the butterfly spreading its wings at the Equator can create massive unstable weather systems such as tornados in the U.S. weeks later,  spinning off Starlink for an IPO could lead to such a larger-scale impact on the small satellite market unforeseen.  NSR’s Small Satellite Markets, 6th Edition report assesses over 140 current or planned smallsat constellations. Based on the factors studied , of which the most critical is current funding and the ability to raise money (or lack thereof), it is estimated that 35% of all constellations planned are not likely to launch, with another 5% deemed at low likelihood. Of the constellations expected to launch over the next decade across all applications, Communications will dominate the market by application, with Starlink making up a major portion.

Funding is one of the biggest challenges faced by NGEO constellations, due to the scepticism and uncertainty around the business case. Investors are cautious due to lack of information and understanding about the LEO business model and are holding back until constellations currently in development like Starlink and OneWeb are further along. While OneWeb has been slow to launch and now has 40 satellites in orbit, SpaceX is following a more aggressive timeline to get satellites into orbit to reach the revenue generation stage much quicker and, to increase investors’ confidence in the project. In terms of funding, SpaceX has raised over $1 billion for Starlink. However, the CAPEX associated with manufacturing, launch and serviceability of 42,000 satellites is expected to be orders of magnitude higher than current funding, and while some of it will be recovered by revenues generated by the constellation itself, it is safe to say that it will not be enough to fund the full constellation. Furthermore, SpaceX has maintained to date that the revenues from Starlink will help fund the Starshipproject. So how does the IPO fit into this equation?

Free Cash to Flow?

Taking Starlink public has one obvious advantage — the “free” cash associated with the sales of the stock. While this cuts down the share of Starlink and therefore SpaceX’s share of the profits, the company’s valuation and the value of each share is expected to increase with the IPO, if done right. Two of the most critical factors for the success of an IPO are initial pricing and brand perception. With Elon Musk’s brand and space considered a “sunrise” industry, the latter hurdle can be considered easy to overcome. The stock price is a tricky equation to solve — if the chosen price is too low, it leaves money on the table and if too high, the stock prices can fall quite quickly bruising the company’s reputation. Assuming the shares are priced appropriately, the questions then remain:

Would cash from the IPO be enough to fund the remaining constellation as well as the Mars project?
Is the Offer of Sale (OFS) going to be part of this IPO? That is, will Starlink’s existing shareholder sell a part or all of their shares?
Will there be a follow-on public (FPO) offering? That is, will Starlink issue additional shares at a later stage for further fund raising?

The IPO Impact

At the micro level, if additional funding is required — whether through FPO or equity — and at the macro level to maintain investors’ perception of this market, it would be critical for Starlink to start generating revenues as soon as possible (and in line with their projections at the time of the IPO).

This will help increase Starlink’s market capitalization and therefore its ability to issue more equity shares at relatively high offering prices. And there lies the biggest challenge — revenue and profit generation. A major share of revenues for Starlink is expected to come from government contracts. While that is promising, maintaining a 40,000+ satellite constellation, with competition from terrestrial solutions and potentially other LEO constellations (like Amazon’s Project Kuiper), technical challenges in the ground segment as well as difficulties in obtaining landing rights can severely restrict the revenue and profits from the constellation. Managing the initial and ongoing investor and public expectations will be crucial for the long-term success of the IPO and the company’s valuation and will open investment doors for other smallsat constellations. Even though the business cases, services offered and even the target market may be different for other smallsat constellations, a system like Starlink can be highly influential to sway investors — one way or another. Similarly, if Starlink fails to meet investors’ expectations, it will not only impact Starlink’s valuation and investments in other SpaceX projects, but will also raise more concerns around the constellations business model in general, resulting in a decline in funding for similar projects.

Bottom Line 

It is hard to argue that there is a direct, albeit disproportional, link between the success of the mega constellations and the rest of the small satellite market. Small satellite constellations make up 75% of the overall market (in number of satellites). Amongst the numerous challenges NGEO constellations face including regulatory hurdles, launch and manufacturing constraints, competition, and distribution, the ability to raise funding is a critical determinant of the success or failure of a system — even if only in the short term.

Investors assess various factors before deciding to fund a company, and one of the major considerations is the competition — both as a competitor but also to draw parallels about the market they are thinking about investing into. Elon Musk and the SpaceX brand compounded with the largest and highest risk NGEO constellations has accumulated a lot of interest from investors and any updates — strategic or otherwise — will most definitely have a butterfly effect and impact most future investment in the smallsat market at-large.  

Shagun Sachdeva, NSR Senior Analyst has presented the following

NSR now offers Small Satellite Markets, 6th Edition



Success for PLD Space and the Firm’s Full Rocket Engine Test

PLD Space has successfully achieved a full rocket engine test for the MIURA 1 mission.

TEPREL B is the regenerative engine, designed by PLD Space,that will be used on MIURA 1 flights and is a key milestone in engine qualification campaign, achieving a full-time engine validation on Wednesday, February 26, 2020.

In May of 2019, PLD Space suffered a catastrophic engine failure, which resulted in material damage, including the loss of the first flight version of the TEPREL-B liquid rocket engine, developed by the company for the MIURA 1l launch vehicle. The company then decided to pause the qualification process and analyze the root causes of the failure to solve the problems that were encountered.

Image is courtesy of PLD Space.

After eight months of hard work, PLD Space successfully achieved a full mission duration hot test of the flight engine. This allowed the company to validate the nominal engine performance during the full mission duration burn of two minutes, the necessary time to boost MIURA 1 launch vehicle into space.

Raúl Torres, CEO and Co-Founder of PLD Space, stated that this milestone is a huge step forward for PLD Space, for the Spanish space sector and European small launcher competitiveness and will allow the firm to be one of the few companies in the world that has successfully developed, tested and qualified propulsion technologies for space launch vehicles. Achieving this important milestone implies a turning point in the commercial space race and takes PLD Space step closer in launching MIURA 1 to space. With this result, PLD Space has a rocket engine capable of reaching space soon.

Advantech and TXMission Reveal a Technology and Distribution Partnership 

Combining their talents and business acumen Advantech Wireless Technologies Inc. (“Advantech”), has signed a sales and distribution agreement with the California and Watford, England based TXMission, a designer and manufacturer of high performance SmallSat modems for the New Space Industry. This announcement precedes their participation at Satellite 2020 in Washington, DC, March 10-12 where Advantech Wireless Technologies will be available at booth #1216.

The companies will together develop a comprehensive suite of SmallSat, Airborne and Comms-On-The-Move (COTM) communication products for markets requiring versatile, extremely low size, weight and power (SWaP) products that provide leading-edge performance. The range of fully integrated SmallSat and UAV/Airborne products to be developed will include advanced RF transceivers, multi-gigabit modems for onboard and ground segment applications, low SWaP satellite terminals, antennas, network management systems and 5G technology solutions.

John Restivo, President of Advantech Wireless Technologies is pleased to announce the partnership with TXMission, a professional off-the-shelf, end-to-end satellite communications company.  He said that Advantech plans to integrate their microwave RF technology with the TXMission modem, resulting in a system level solution that will work across multiple Satcom markets. They are certain this relationship will present new opportunities for Advantech.

Steve McHugh, Chairman of TXMission added that this is an exciting development that combines their unique SDR technology with Advantech’s renowned RF capabilities.

Ball Aerospace’s Advanced Spectrometer Instrument Completes PDR for MethaneSAT

Ball Aerospace has successfully completed the preliminary design review (PDR) of the advanced spectrometer instrument for the MethaneSAT Flight System, a 350 kg. satellite that will locate and measure methane emissions around the globe — with the completion of PDR, Ball will proceed with the critical design phase.

MethaneSAT is expected to be launched in 2022 by MethaneSAT LLC, a subsidiary of Environmental Defense Fund (EDF). The non-profit is dedicated to creating innovative science-based solutions to critical environment challenges, including anthropogenic methane emissions, a significant contributor to global climate change.

Two extremely sensitive spectrometers sit at the heart of the Ball-designed instrument that will measure a narrow part of the shortwave infrared spectrum where methane absorbs light, allowing it to detect concentrations as low as two parts per billion. In addition to the MethaneSAT instrument, Ball Aerospace is providing flight systems integration and testing, launch support, and commissioning services.

Artistic rendition of the Environmental Defense Fund’ MethaneSAT.

Dr. Makenzie Lystrup, VP and GM, Civil Space, Ball Aerospace, said the firm is excited to be a part of a mission that aims to study and address the impact of methane on the environment and climate. MethaneSAT fits well with Ball’s long history of Earth science.

Mission co-lead Dr. Steven Hamburg, who also serves as Chief Scientist for Environmental Defense Fund, noted that MethaneSAT is built around a set of high performance technologies and sophisticated analytics tools that, when combined, provide a major leap in the ability to measure and quantify even low-level methane emissions across the globe from space. A lot is being asked of the technical partners and Ball Aerospace is rising to the occasion.

Altitude Lowering Underway for ALE’s Shooting Star Efforts

ALE Co., Ltd.(ALE), led by CEO Lena Okajima, has reported that the company’s first man-made shooting star satellite that was launched on January 18, 2019, has begun its mission to lower its altitude.

ALE-1, the first satellite jointly developed by ALE and National University Corporation Tohoku University (Tohoku University) to try to create a man-made shooting star, was launched on January 18, 2019, on the JAXA Innovative Satellite Technology Demonstration-1 (Epsilon Rocket No. 4) with six other satellites and was placed into orbit at an altitude of about 500 km.

The operating altitude for releasing particles to create man-made shooting stars is targeted for about 400 km., which means the satellite will need to lower its altitude for about 100 km. to a required altitude for operation.

A thin film orbit release device, DOM®: De-Orbit Mechanism (DOM®), jointly developed with Nakashimada Engineering Works, Ltd. and Tohoku University, that is attached to the satellite is used to lower the altitude gradually using atmospheric drag.

ALE-1 will reach the altitude of 400 km. in about one year and, after technological verification, it will begin its emission operation of the man-made shooting stars.

This ALE-1 satellite photo is courtesy of the company.

Change in schedule of altitude descent

At the time of its launch, ALE-1’s altitude descent was originally planned to start from March of 2019; however, due to additional post-launch trials, detailed orbit data collection and technological verifications for the use of second satellite (ALE-2) operations, the starting date for ALE-‘s altitude descent was postponed.
     After the initial trials, completion of data accumulation, and technological verifications for ALE-2 operations, the DOM® thin film unfolded on December 25, 2019, and ALE-1’s altitude started to descend. The results from monitoring orbit transition for one month confirmed that the speed of altitude descendant of ALE-1 has accelerated.

New Dual Band SSPA Debuts from Teledyne Paradise Datacom

Teledyne Paradise Datacom (Paradise), part of the Teledyne Defense Electronics Group, has rolled out their new L- and S-Dual Band solid state power amplifier (SSPA).

Both S- and L-band frequencies have been the industry’s bands of choice for positioning and tracking applications such as global positioning systems (GPS) and Tracking, Telemetry, and Control (TTC) ground stations. This new dual band product offers customers a virtual ”two for the price of one” SSPA solution that dramatically lowers the costs of command and control, leaves a much smaller footprint, but also delivers higher reliability compared to traditional klystron power amplifiers. Download the Product Overview.

Teledyne Paradise Datacom’s L/S Dual Band SSPA with Compact Outdoor Enclosure from Paradise Datacom.

Photo is courtesy of the company.

An ideal fit for Military and Commercial command and control environments, the L/S-band SSPA provides the high reliability of solid state technology required to support critical communications between the earth and satellites, in a rugged, outdoor-rated enclosure.

Compared to older vacuum-based technology, the enhanced reliability and ease-of-use gives operators the opportunity to support command and control facilities with non- or semi-technical staff. In instances where modular solid-state deployments with n+1 redundancy are used, it is often even possible to benefit from unmanned or remotely manned uplinks.

The L/S Dual Band SSPA is available in two power levels, both of which are housed in rugged, outdoor-rated enclosures. Power levels up to 800W are available in the High Power Outdoor SSPA package (part number HPAS2800GHXXXXXG) and up to 400W in the Compact Outdoor SSPA enclosure, (part number HPAS2400GCXXXXXG). Both units are available covering sub-band “G” (1.75 to 2.12 GHz).

Mike Towner, Senior Director of Sales and Marketing, said that smaller satellites and new deployment technology are reducing satellite launch costs and the number of satellites on-orbit is increasing dramatically. This is increasing the demands on operators that are performing station keeping and their need for reliable command and control systems. The introduction of the industry’s first, outdoor, dual band SSPA gives the flexibility of a single amplifier covering both bands, and the reliability and reduced maintenance costs that come with a solid state solution.

For more information, visit Teledyne booth #708 at the Satellite 2020 show in Washington, DC March 9-12.

Propulsion Systems from Exotrail to Empower AAC Clyde Space’s Smallsats

Exotrail has signed a contract with AAC Clyde Space to equip that firm with propulsion solutions for their customers, including Eutelsat for their ELO 3 and ELO 4 spacecraft.

Exotrail will provide propulsion systems for the two 6U cubesats that will be manufactured and delivered to orbit by AAC Clyde Space. The Eutelsat mission is a precursor to a potential constellation called ELO (Eutelsat LEO for Objects). The contract is to be delivered before the end of the year, both satellites will be launched in 2021.

Artistic rendition of a smallsat powered by Exotrail’s propulsion system.

Image is courtesy of the company.

Exotrail started its propulsion system development with a flight demonstrator project that was designed, built, qualified and delivered in only 10 months. The launch of the flight system demonstrator, initially scheduled to fly in November of 2019 on board a PSLV, is now planned for March of 2020 (due to a launcher delay).

The resulting heritage acquired with this project, along with the expertise and innovation put forward in Exotrail’s product development, has allowed the company to secure their first customers.

Artistic rendition of Eutelsat’s ELO constellation on-orbit.

Image is courtesy of the company.

According to the company, these customer contracts demonstrate that Exotrail’s strategy is paying off and that the company has moved quickly from vision to reality, a vision to provide a propulsion system as well as a set of software, hardware and services and to change the way satellites are launched and operated on orbit. This vision is now translating into revenue and success.

AAC Clyde Space CEO Luis Gomes said the company is looking forward to working with Exotrail. Their product is a perfect fit for both the firm’s needs and the customer’s requirements. Their modular ExoMG™ product has a highly compact and flexible form factor with industry leading performance levels, in particular with respect to thrust levels.

David Henri, Co-founder and CEO of Exotrail, added that the firm is an established specialist in advanced smallsat missions and provides market-leading New Space solutions. Exotrail is delighted to be able to assist AAC Clyde Space for this mission with the ExoMG™ – smallsat. This underlines the relevance of the company’s solutions for optimizing global constellations and the firm’s expertise in this growing sector.

Shetland Space Centre Receives £2 Million for Launches this Year

Plans that would see a remote island in the far north of Scotland become home to the UK’s first spaceport have come a step closer to fruition after a major funding boost, this according to a report in The Scotsman national newspaper’s infosite.

Unst in Shetland, the most northerly inhabited island in the UK, has been selected as the ideal spot to construct a commercial satellite launch pad as the nation bids to join the new and rapidly growing global space sector.

Photo of the Shetland Space Centre is courtesy of the company.

Now Shetland Space Centre (SSC) is set to benefit from investment of more than £2 million from private equity firm Leonne International, which will own a 20 per cent stake in the venture. The cash will be used to develop the Unst facility, including a vertical-launch site for smallsats and a ground operations station.

The first high-altitude, commercial, payload launches are set to take place later this year, with the spaceport expected to be fully operational by 2021. A mixture of commercial and government clients will be able to use the space hub, but it is also predicted to attract an increasing number of tourists to the rugged outpost.7

To read the entire, informative article, please access this direct link to The Scotsman infosite…

Financial Inflow of 3.1 Million Euros for Kleos Space S.A.

Kleos Space S.A. (ASX: KSS, Frankfurt: KS1) has secured a €3.1 million loan agreement with Dubai-based family office Winance to progress its commercialization plans and repay the extant convertible note— Winance will further provide optional €6.0 million through a convertible note agreement, subject to final documentation.

Dubai-based Winance reached out to Kleos Space during the trade mission organized in Dubai by the Chamber of Commerce of the Grand Duchy of Luxembourg, in cooperation with the Ministry of the Economy, the Luxembourg Embassy and the Luxembourg Trade and Investment Office in Abu Dhabi at the end of January.

Artistic rendition of Kleos Space’ Scouting Mission smallsat.

Image is courtesy of the company.

These funds will allow Kleos to repay extant Evolution Equities convertible notes for the development and launch of the firm’s second cluster of satellites and increase its presence within the US defence sector. The Loan Agreement ensures Kleos is well-funded to execute its commercialization plans while awaiting revenues from early adopter contracts.

Kleos will commence generating first revenues after the launch of its Scouting Mission satellites from Chennai, India, in the coming weeks. This initial satellite cluster is the foundation of a larger constellation which will geolocate radio frequency transmissions to provide global activity-based intelligence irrespective of the presence of positioning systems, unclear imagery and targets out of patrol range.

CEO of Kleos Space, Andy Bowyer, said that the Loan Agreement provides Kleos with working capital to progress the development of the company’s second cluster of satellites while awaiting revenues from the Scouting Mission satellites. Luxembourg has a successful economic partnership with the UAE, developed over the past decades. This collaboration provides Luxembourg-based organisations operating in the space sector, such as Kleos Space, with access to investment and financing opportunities.

Waqas Ibrahim, Director & CFO of Winance, added that this new partnership is in line with Winance’s vision of investing in proficient and progressive thinking management teams. The firm is convinced that this collaboration can serve as a springboard for both our companies in the GCC, Australian and Luxembourg markets. Kleos technology has never been more relevant than today in addressing a real world need and has attracted interest from governments and private organizations.

Marc Serres, CEO of the Luxemboug Space Agency, noted that Luxembourg and the UAE share the same commitment to support the economic development of the commercial space industry. The agreement between a Luxembourg-based company and a Dubai family office shows that our bilateral cooperation with the UAE is successful when it comes to developing high technology space products and services through financing instruments tailored to meet the needs of private companies.

New Satellite Manufacturing Facility is Opened by Mitsubishi Electric Corporation

Mitsubishi Electric Corporation (TOKYO: 6503)  has completed construction of a new facility for the production of satellites at the company’s Kamakura Works in Kamakura, Japan.

Together with existing facilities, Mitsubishi Electric’s combined annual capacity will increase to 18 satellites, up from 10 at present, which will enable the company to satisfy the growing demand for governmental satellites in Japan and commercial communication satellites worldwide. New facility at Kamakura Works.

Photo of the new Mitsubishi satellite factory is courtesy of the company.

The new facility will increase production efficiency, shorten production time, reduce costs and elevate product quality for enhanced competitiveness. It will incorporate information technologies based on Mitsubishi Electric’s e-F@ctory solutions, which extract hidden benefits from existing resources through integrated automation to realize improved efficiencies, reduced costs and increased productivity.

In addition, the new facility will incorporate Mitsubishi Electric products, such as a heat pump air-conditioning system, LED lights and high-efficiency transformers to further reduce energy consumption.

The Japanese market for governmental satellites is expected to grow under the country’s Basic Plan for Space Policy, which calls for the development of observation, communication and positioning satellites that support daily life and facilitate the commercial use of space for the enhancement of Japan’s industrial and scientific foundations.

Last year, the Japan Aerospace Exploration Agency (JAXA) announced its participation in the U.S. government’s Gateway project targeting a manned station near the moon, which is expected to stimulate increased demand for governmental satellites. Separately, the global market for small communication and observation satellites also is envisioned growing.

Mitsubishi Electric’s long involvement with satellites includes the Himawari-7, -8 and -9 weather satellites, the Superbird-C2-Japan’s first commercial communications satellite, QZS high-accuracy positioning satellite systems, and the Es’hail-2 for Qatar Satellite Company in Qatar. Going forward, Mitsubishi Electric aims to more widely apply technologies it cultivates for governmental satellites to enhance its position in expanding fields, such as next-generation-engineering test satellites.