For quite some time, American space exploration was a locked circle: There was only one customer, the U.S. government (NASA) and a few giant defence contractors. At that point in 2008 Elon Musk’s SpaceX put the first privately sponsored rocket into orbit, Jeff Bezos’ Blue Origin pledged private flights, and space was unexpectedly a lively market with companies competing to put humans and satellites into orbit.
After a decade, hundreds of start-ups have gathered to the space sector, bringing classy technologies that include quantum computing, artificial intelligence, space-based solar power, phased array radar, “tiny” satellites and services that could not be believable just a few years ago.
Space Angels, an early-stage financier that also follows investments in the sector, reported that project capitalists spent $5 billion into space technologies in the first three quarters of 2019, placing the year on track to be the biggest year till now, with Blue Origin drawing in $1.4 billion from Bezos. Ever since 2009, said Chad Anderson, CEO of Space Angels, investors have contributed nearly $24 billion into 509 companies.
Anderson said that SpaceX initiated the transformation not just by posing competition to NASA but issuing its prices for a launch. Before that exposure, space was really an impenetrable market, making it hard for potential competitors to value their products. “It’s been a really significant decade for commercial space,” said Anderson.
The most substantial amount of venture capital still goes into the essential task: putting satellites into orbit. Anderson says 89 companies have obtained funding for so-called small-lift launch vehicles. These are companies guaranteeing to put payloads of up to 2,000 kilos (4,400 lbs) into low Earth orbit. Their emphasis is a new generation of small satellites such as those used by SpaceX’s StarLink and OneWeb, which guarantee broadband internet access in even the most isolated parts of the world by installing “constellations” of hundreds or even thousands of small satellites.
Satellites have become so normal you can now buy a typical 4-in. by 4-in. “cubesat” kit online. All this activity could indicate 20,000 to 40,000 satellites joining the 1,000 currently in orbit over the next few years. “It’s rapidly becoming congested,” Anderson said of the marketplace for small-lift launch. Of the venture-backed rocket companies, Rocket Lab and SpaceX, with launch sites in Virginia and New Zealand, are making frequent launches, though Richard Branson’s Virgin Galactic is scheduled to start flying its crewed shuttle this year.
The sky is also getting packed. Apart from the thousands of new satellites programmed for launch, there is already a lot of chaos in space — as many as 250,000 pieces of debris and junk circle the Earth. Till now the U.S. Air Force has taken the chief role in tracking debris and cautioning satellite operators about possible smashes. But the military’s tracking radar, with some machinery dating back to the cold war, can only identify pieces 10 cm (4 in.) across or larger. LeoLabs, a start-up centred in Menlo Park, California, has developed an innovative radar system that can identify objects in orbit as tiny as 2 cm (less than an inch) long.
A tiny object travelling at more than a thousand miles an hour can cause serious damage to a satellite. LeoLabs allows customers to track their small satellites more efficiently and to move them to a new position safely. “That will take many of the collision possibilities off the table,” says CEO and founder Dan Ceperley. His company has made phased array radars that manoeuvre the radar beam electronically — quicker than a conventional dish antenna — in three locations: Texas, Alaska and New Zealand. So far, LeoLabs has obtained $17 million from venture funds, including WERU Investment, Marc Bell Capital Partners, Airbus Ventures, Seraphim Capital, and Space Angels.
Many of the 1,000 satellites now in orbit are busy in observing Earth. They watch the weather, temperature and humidity, among lots of other phenomena, and take millions of images. SkyWatch, based in Waterloo, Ontario, lately closed a $10 million round of funding led by San Francisco’s Bullpen Capital to develop its facility to make satellite data readily available to companies.
SkyWatch would manage licensing and payment for data via subscription fees, and companies could use its software to make their own apps for tasks such as tracking crops or measuring damage from natural disasters. SkyWatch CEO James Slifierz matches his timing to the outcome of the creation of the global positioning system infrastructure. Once GPS was in position, civilian applications followed.
The rising flow of data from satellites has elevated concerns about data security. SpeQtral, located in Singapore, plans to construct encryption keys based on the laws of quantum physics to guard space-to-Earth communications. “The security of any communications is important,” says Chune Yang Lum, CEO of SpeQtral, which has raised a $1.9 million seed round ran by Space Capital, the venture division of Space Angels. Quantum encryption has been publicized as nearly unbreakable.
Start-ups don’t have domination on developing new space applications. Tech giant Google has pursued ways to commercialize its developing expertise in artificial intelligence and its massive computing power in the cloud. “We work with some of our major and most transformative customers to do something impressive,” said Scott Penberthy, manager of applied AI at Google Cloud.
He said Google Cloud has done several projects with NASA’s Frontier Development Lab, counting one that takes low-resolution photographs and merges them using AI to create a high-resolution image. Another offer from Google would facilitate navigation on the moon’s surface (which has no GPS) by having AI matching an astronaut’s settings with photos of the moon taken from space.
NASA is itself trying to take advantage from the innovations brought by start-ups. In December, NASA’s Ames Research Center declared a deal with the Founders Institute, a famous start-up accelerator, to make some of its technology accessible to start-up entrepreneurs. In September 2019 the space agency publicized the latest round of its Tipping Point Program, a public-private program, was distributing $43.2 million to 14 American companies whose technologies could contribute to NASA’s design for its Moon-to-Mars project. Contributors include SpaceX, which will work on nozzles to refuel spacecraft, and Blue Canyon Technologies, a Denver start-up making autonomous navigation systems to allow small satellites to manoeuvre without communicating with “Earth.”
In the last five years, NASA has presented five groups of Tipping Point Awards, value more than $120 million combined. Generally speaking, a company or project nominated for a tipping point award gets NASA resources up to an agreed amount, with the private side giving for at least 25% of the program’s total costs. This allows NASA to guide the development of essential space technologies while attempting to save the agency money.
Regardless of the surge of cash, not all space projects get funding easily. John Mankins, an ex-NASA physicist, has long been a supporter of space-based solar power. Satellites would absorb solar energy, turn it to microwaves and radiate it down to Earth, where it would be transformed into electricity. Mankins believes such a system taking benefit of the latest technological advances can provide electricity at a reasonable price to areas of the world where power is costly.
Mankins’ company, Solar Space Technologies, has made a joint mission with an Australian company to seek funding to supply power to distant parts of Australia with minimum influence on the atmosphere. Though the cost for space-based solar power may have been expensive previously, Dr. Michael Shara, an astrophysicist at New York’s Museum of Natural History, said “itDr gets exciting” as costs decrease.
Anderson, the Space Angels chief executive, said venture capitalists are reluctant to invest in space solar power because these are large infrastructure plans. “They require a substantial amount of capex, and their benefits are much longer than the usual 10-year lifetime of a venture capital fund.” But as anxiety about climate change increases and the price of putting “stuff” in orbit drops, clean energy from space may become an appealing entrepreneurial proposition.