How new satellites are conquering Space
From the amount of money flocking to space, you’d think Apple and Facebook had just found millions of potential customers living phoneless and friendless on the far side of the moon.
To be sure, it’s been a breakthrough couple of years for human spaceflight. A record-shattering two dozen private citizens flew on commercial spaceships in 2021 with billionaires Jeff Bezos and Richard Branson leading the way. And NASA, which now buys rides from SpaceX, expects to decommission the International Space Station a decade from now and rent accommodations on commercial stations it is encouraging the private sector to build as the United States and China set their sights on lunar outposts.
For now, however, human spaceflight remains a high-profile but rather small piece of the global space economy.
And yet investors are taking a shine to space like never before, pumping billions into new ventures in recent years. Part of the reason, no doubt, is the crazy money “sloshing around in start-up land right now,” as The New York Times recently put it. Hardly a day passes without one space venture or another closing of a new round of funding or announcing plans to go public via the fast-track IPOs that have been all the rage during the pandemic.
Of the roughly $40 billion pumped into space startups during the first two decades of the 21st century, all but a third was invested since 2015, according to industry analysts BryceTech.
Some $7.6 billion in financing flowed into space startups in 2020, with more than 120 new companies receiving investment. In 2021, nine space companies — from launch startup Astra to commercial weather satellite operator Spire Global — raised hundreds of millions by merging with so-called blank-check companies that exist to find a promising business to buy.
“The space sector is 10 times more robust than in 2015 in terms of the quality of entrepreneurs, the quality of ideas, the quality of customers,” Ubiquity Ventures managing partner Sunil Nagaraj recently explained. “On an absolute basis, there are more great startups at every stage than there were five or seven years ago, but there’s also more bad space startups.”
Space is a roughly $400 billion global industry that investment bank Morgan Stanley expects will reach $1 trillion annually by 2040. While that’s a lot of rocket fuel, the entire space industry generates less in annual revenue than e-commerce giant Amazon, which rang up more than $450 billion in sales in 2021 (a reason Bezos can afford to put a fresh $1 billion into his Blue Origin space company each year).
Commercial space is having a moment, and excitement over moon shots and space tourism are partly why. But to appreciate one of the more transformative space trends, consider the smartphone. This everyday essential first took center stage with Steve Job’s 2007 introduction of the iPhone.
Four decades after Apollo 11 landed on the moon with less computing power than that first-generation iPhone, NASA scientists Chris Boshuizen and Will Marshall built a tiny satellite out of a $300 store-bought smartphone. Packing a Google Nexus One and extra batteries into a satellite frame twice the size of a Rubik’s Cube, the pair managed to fly what Boshuizen recently described as “the most capable unclassified satellite in orbit at that time.”
“It had the fastest CPU. It had the most memory. It had the most storage. It had an 8-megapixel camera, albeit with a tiny, tiny lens.”
Boshuizen and Marshall soon left NASA to found Planet Labs, a company currently flying the world’s largest fleet of tiny Earth-observation satellites. The cameras and lenses are bigger and better, but the CPUs and memory are still the same commercial-grade silicon that smartphone makers order by the truckload.
“By anchoring ourselves in commercial supply chains instead of space-qualified legacy components, we can upgrade very, very quickly,” Boshuizen explained in 2014, right around the time the company’s first 28 satellites launched (Planet now has hundreds).
Embracing the commercial supply chain was an innovative approach for an aerospace industry accustomed to government contracts and unfazed by space-qualified electronics costing as much as modern automobiles packed with similar components.
Planet did not invent the smallsat or pioneer the use of off-the-shelf parts. However, their success led the way for dozens of companies now using smallsats to perform jobs that once required much bigger, more expensive satellites.
The early killer application for smallsats, besides test-flying new technologies, has been Earth observation. While bigger satellites take better photos, smallsats like Planet’s — by flying in greater numbers — often have the advantage of being in the right place at the right time; not always the most detailed images available, but often the freshest. This strength-in-numbers approach is likewise useful for real-time weather updates and picking up tracking signals emitted by ships and airplanes. And as satellites and their ground systems continue to get smarter, they are evolving from mere eyes and ears in the sky to powerful data-analytics platforms (the direction Planet is heading with funding from 2021’s IPO).
While Earth observation has come a long way in the days since it ceased being a solely government endeavor, it still accounts for just 5 percent of the global space market, according to recent figures from Paris-based Euroconsult. The big money has always been in telecommunications.
Sixty years after the U.S.-European Telstar satellites transmitted the first TV signals and telephone calls around the globe, telecom remains the cornerstone of commercial space. In fact, satellite telecom, along with the government-led satellite navigation sector, account for nearly 90 percent of the global space market.
Most of today’s satcom revenue is generated by big satellites parked high above the equator in so-called geostationary orbits. While they’re ideal for the wholesale movement of digital signals to and from telecom distribution centers, and have had a good run as direct-broadcast television and radio services, they are less suited for providing direct connection to a proliferating population of internet-connected devices.
Satellite broadband, in particularly, has long been a homeowner’s internet service of last resort — slower and more expensive than terrestrial offerings. Satellite megaconstellations comprising hundreds or thousands of smallsats aim to change that equation.
SpaceX, whose not-to-be-overlooked disruption of the global launch market has aided and abetted the smallsat sector and broader commercialization trends, has built and launched more than 2,000 Starlink broadband satellites since 2019 with thousands more to come. And they are not alone. London-based OneWeb has launched more than half its planned 650-satellite broadband constellation, and many other ventures — ranging from Amazon to China’s state-sponsored projects — are getting ready to deploy thousands of their own. PwC France forecasts that megaconstellations will provide the lion’s share of the world’s satellite capacity by 2024.
These trends explain why nearly 95 percent of the nearly 1,850 spacecraft launched worldwide in 2021 were smallsats, a category that includes everything from 1-kilogram picosats to half-ton microsats. Starlink and OneWeb, whose satellites fall in the middle of that mass range, accounted for 75 percent of all smallsats launched in 2021.
SpaceX (not so coincidentally) also led the way in overall launches in 2021, setting a personal best with 31 in year that saw an all-time-record 134 total successful launches worldwide.
If commercial space is suddenly blazing a bright trail across the night sky, the countdown to liftoff began years ago. Count on more and more satellites to keep going up as the barriers to entry continue to fall. As Boshuizen, one of the 26 rich guys and VIPs who went to space in 2021, recently told a Silicon Valley smallsat conference: “Anyone here could more or less take out a mortgage on their home and launch their own cubesat program with their children, which is a radically different point in time than where we were 10 years ago.”
Whether that’s a good thing is another matter.
Brian Berger is the editor-in-chief of SpaceNews, a U.S.-based publication covering the business and politics of space since 1989. Berger joined SpaceNews in 1998 as lead NASA reporter.