7-things Space: January 2022
A long-winded summary of my thoughts on space tech
Welcome to the first edition of 7-things Space this year (yes, I am running a bit late)! In case you forgot - we usually dive deep into 7 interesting* developments in the space industry, from the month that passed.
It was actually quite hard to settle on the “7 things” to talk about in this edition as January turned out to be a super busy month for space tech. If you would like to get daily updates on the key developments in space tech, I recommend subscribing to Payload.
And, please shoot me a note, if you enjoy reading this - I want to hear from you. Without any further rambling, let’s get to 7-things space!
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2 trends in NewSpace to keep an eye on 🚀
1. Space-as-a-ServiceA question I have been asking myself for at least couple of years - “can we outsource space, like we do software today”? As in, is it possible for a non-space company to write a requirements document saying exactly what kind of service they need from space and find a space industry partner to take care of the rest - finding the payload, integrating into a satellite, launching it and delivering the required service - without having to worry about anything that happens in the background. I asked John Springmann this question when he was on my podcast and he mentioned we are not there yet.
Loft Orbital, which was in the news (a lot) in January, is one of those companies trying to do that through its space-infrastructure-as-a-service offering, aimed at both space and non-space companies. Two interesting developments from Loft:
Winning a one-of-a-kind deal with EarthDaily Analytics to build, launch and operate a bunch of their Earth observation satellites —> this is the first time I have seen an EO company “outsource” almost the entire space segment, for their full constellation
Successfully operating in two countries, managing to become one-of-their-own in each country - US and France —> raising funds from the US-based investment group Blackrock and the French public investment bank BPIFrance, and not to mention their supplier partnerships with LeoStella (US) and Airbus (France).
Apparently, a customer in one of their upcoming missions is “one of the top 10 largest companies by market capitalization” - I will leave it you to guess which one it could be!
Although, Loft does not seem to be the only company trying to commoditize space - another one that was in the news in January was Xplore, partnering with Orbital Astronautics, for its sensors-as-a-service offering. And, let’s remember Spire also has a Space Services business (which is somewhere in the middle between Loft and Xplore’s offer) with some traction for EO, communication and space debris payloads.
2. Weather-Data-as-a-ServiceOk, this is a fascinating development, not just because I work for Tomorrow.io and we are building weather satellites, but also because what this could mean for the nascent commercial weather industry. In my opinion, the commercial Earth observation market is underreported, and the commercial weather market is just not understood.
So, what is it about? The US Space Force (USSF) is planning to buy weather data commercially through a data-as-a-service (DaaS) approach. Unlike traditional EO in which DaaS is almost a norm (for instance, see the US National Reconnaissance Office latest announcement), weather has been stuck in the OldSpace era - sticking to acquiring and operating satellites independently.
And, why is this a big deal? Well, for starters, technological innovation in spaceborne weather observations had been mostly limited to the major agencies (NOAA, NASA, EUMETSAT, JAXA etc.), with very little contribution from the private sector. This is partly why, Tomorrow.io’s commercial motivation to build weather radar satellites and its contract from the US Air Force is a big deal. Then, there is the hope for commercial industry to flourish through these potential contracts - especially the newer players. Apart from a couple of wins from Spire and GeoOptics, there has been limited incentive for companies to invest in improving global weather forecasting (somehow, the need for the world to adapt to a changing climate wasn’t enough).
In any case, I have been learning so much about the forgotten state of the weather industry especially related to space, including how little attention it gets. I will do a deep-dive on this at some point, but in the meantime, couple of starters - there is only 1 radar today in space measuring global precipitation and the US military’s weather satellites will stop working in a couple of years - and we have just started to look for solutions, the former by Tomorrow.io and the latter from the USSF.
2 interesting things in Earth observation 🛰️
1. The Size of the Earth Observation Market Ok, to be honest, there were quite a few developments in EO in January, from hyperspectral going mainstream thanks to Wyvern and Pixxel to insurtech on track to becoming the new anchor industry (like defence is/was) for EO, thanks to its growing adoption in insurance, as seen by the Descartes Underwriting and Iceye funding rounds.
But, I want to focus on the market reports for Earth observation - I came across two of them. One, the nominal EuroConsult market report showing EO is about 4% of the global space industry ($337B) i.e. about $13.5B, with over $11.8B generated through manufacturing contracts, meaning the value generated from EO data and services was only ~$2B - a multi-billion dollar market, after all, as I wrote few months ago.
This analysis was pretty much on the same page with the Earth Observation Market report released by the EUSPA (European Union Agency for the Space Programme) - not ESA. It is free to read, and it is an extremely well-done compilation of all things EO, specifically relevant to Europe and the Copernicus programme. Couple of interesting infographics below, showing demand and revenue distribution of EO (doesn’t include weather for whatever reason, although I would consider it EO).
The Global Risks Report 2022, puts together a detailed analysis on the top risks globally, with the top 2 being extreme weather and climate inaction - two domains where EO has a big role to play. So, the demand for EO data is more than it has ever been
But, the question is: will there be more solutions that solve problems using EO technologies or will we just continue pushing EO technologies in the hope that they will solve problems? Subtle difference!
2. National Earth Observation Strategies - Canada vs Australia Canada unveiled their new strategy for Earth observation, very much focused on climate change! Rather than proposing to launch 'yet another' satellite, the EO strategy is (smartly) focused on developing applications with available EO data - a combination of current institutional and commercial missions. As I wrote in my Twitter thread, the country’s EO sector - full of EO data acquistion, EO data dissemination and EO intelligence companies - does not get as much attention as it deserves. For once, it was nice to see a national strategy that was very much solution-focused (powered by technology) rather than being purely technology-focused.
Contrast this with Australia’s strategy - to invest in an indigenous Earth observation satellite program to reduce reliance on foreign data, as “there is no guarantee all necessary data sources will always be freely available.” This recommendation highlighted in the decadal plan report for Australian space science, is aimed at making sure Australia invests in capabilities such as enhanced science, observations and modelling.
I don’t think there is a right approach here - Canada wants to leverage on all their current capabilities and invest in building solutions, while Australia wants to invest in growing their capabilities to make sure there is a home-grown EO industry. As long as the motivation lies in solving important problems and is centered on international collaboration, everyone will be winners.
PS. Australia also wants to establish a national program on space weather research - this is amazing. I don’t think we worry much about space weather as much as we should - leaving auroras aside, powerful solar flares will damage most satellites!
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3 regional/continental space strategies to follow 🌍
1. Europe We got a glimpse of the future of European space strategy with some of the announcements made during the EU Space Conference. From plans to create the European Space Launcher Alliance focused on creating a launcher strategy to announcing plans for the space-based connectivity infrastructure based on quantum encryption, there was quite a lot to digest. There was also the formalising of the billion euro startup fund for space, albeit left with more questions on how it will work.
But, major strategic decisions will be taken during the upcoming European space summit in a few days. From clarity on Europe’s ambitions on manned spaceflight (passenger or pilot?) to how Member States want to collaborate on space (or not), there is going to be a lot of things on the plate to discuss. Irrespective of the outcomes, one area I think Europe will continue to lead is Earth observation, with its world-class Copernicus programme, along with as its focus on space sustainability.
2. Africa Although Africa is an emerging player in the global space industry, things seem to be moving in the right direction. The African Space Agency (ASA) which was formalised in 2021 should commence operations in 2022 after the appointment of the leadership. ASA will be based in Egypt under the Egyptian Space Agency (EgSA), one of the leaders in the space industry in the continent. EgSA is also leading the African Development Satellite Initiative, an initiative to build a satellite in Africa as a collaboration between several African nations.
Meanwhile, South Africa just launched three nanosatellites with AIS sensors for maritime monitoring, while a Kenyan space company called SayariLabs, will soon launch a software-defined nanosatellite. Space in Africa, the market research firm will also be hosting the NewSpace Africa conference in April. So, definitely looks like things are picking in the African space ecosystem, but how united will the efforts be? And more importantly, do they need to be?
3. Latin America Finally, Latin America. Did you know there was a Latin American and Caribbean Space Agency (ALCE)? I did not until I read this piece. Made up of 18 countries in the region, the goal is grow the space industry in the region. However, Brazil has not signed up, and there is no guarantee on funding. So, will this take off?
Although, the recent developments in the private industry are promising. Mexican startup, Dereum Labs is collaborating with Airbus on lunar resources extraction technologies. Argentine startup is seeking funding to launch a satellite constellation for providing IoT connectivity in the continent. Last but not least, remember Satellogic, the Earth observation company that went public recently? It’s from Argentina. I am hoping their successful exit propels NewSpace in Latin America!
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Cheers,
Aravind
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