Fabien Jordan Credit: ELSE SA
UPDATE Aug. 8, 2017: ELSE announced closing a second $3-million round of funding with a group of investors led by Airbus Ventures, a Geneva-based asset manager and private investors. The company said its first two nanosatellites are on schedule for launches in 2018. Combined with a previous $3 million in grants and a European Space Agency contract, ELSE says it now has sufficient funds to build and launch its first two demonstration satellites in 2018.
ELSE/Astrocast CEO Fabien Jordan said: “This seed round validates our ambitious plan to connect the planet and enhance machine-to-machine communications through our innovative satellite constellation and network technology. We are looking to disrupt and serve numerous industries and this successful capital raise is an important milestone for us in that plan.”
PARIS — Geostationary satellite fleets lying down with LEO/MEO startups appears to be the seasonal flavor in the commercial satellite world. SES and O3b, Intelsat and OneWeb, Telesat Canada with its own LEO system, DigitalGlobe with Taqnia.
Now, in the M2M/IoT sector, it’s Thuraya Telecommunications and startup ELSE SA of Switzerland and Portland, Oregon, which plans a first demonstration launch of its Astrocast constellation in 2018.
So for it’s only an MoU, but both companies say their agreement is designed to last.
ELSE/Astrocast Chief Executive Fabien Jordan and Chief Financial Officer Kjell Karlsen discussed the company’s status and plans in an April 12 interview.
What is the goal of the MoU you signed with Thuraya?
Jordan: This is the first step in our collaboration with them. It will lead to a more formal agreement once we have demonstrated the Astrocast concept in orbit next year. We are going to launch one — in fact, likely two — demonstration satellites. Thuraya will support us for this.
We anticipate a more formal agreement with them for the start of the commercial phase in 2019.
What is the end game: Would they then become an investor?
Karlsen: That is still to be determined. As far as becoming an investor, we have not had a long discussion with Thuraya. You should ask them. Obviously we would be thrilled if they became an investor in us at some point in time.
For now, we will collaborate on the spectrum, on their services and on their distribution. They have technical know-how that will help us in making ELSE and Astrocast stronger. The first goal is their support for our demonstration mission — two satellites to be launched in 2018.
We fully expect this to be a long-term collaboration and we’re excited that we came to an agreement with Thuraya. We know the company and its management very well.
[Editor’s note: In response to SpaceIntelReport.com inquiries, Thuraya Chief Strategy Officer Jassem Nasser said April 12:
“The collaboration is on multiple fronts, including the distribution of ELSE’s products and services as well as integrating the technology platform with both networks. With respect to investing in ELSE, this is a possibility that Thuraya will assess in the future. At present, we are contributing to enable ELSE to launch its service and strengthen our plan for New Wave services” for M2M and IoT.]
Thuraya’s Jassem Nasser. Credit: Thuraya
Thuraya mentions ELSE in the context of its Futura strategy for next-generation services. It sounds like more than a one-off agreement.
Kjell Karlsen. Credit: LinkedIn
Karlsen: Yes and we can be a very good complement to them knowing what their market is today. I don’t think there’s any way that Thuraya or any of the established operators can do exactly what we are doing for the price we’re proposing.
We think we can be a good complement where Thuraya provides us support on their distribution and their technology. We help them offer an additional product to their customers.
So sales and marketing teams would travel with offers of both companies’ portfolios?
Karlsen: That is what we foresee after we start our commercial operations in 2019, yes.
How does Thuraya expedite your market access?
Jordan: They have a great distribution network in place that we can access and benefit from. We will also develop our distribution network but it would be extremely useful to start with them.
Karlsen: They also have an asset that is hard to come by for a small startup: access to spectrum. We’re finding a way to collaborate on that.
Astrocast uses L-band. What is your licensing status?
Jordan: We don’t want to provide many details about that but we are fully collaborating with Thuraya on that. There is licensing already in place, but the strategy regarding spectrum is very complex and involves other parties. We cannot provide details for now.
Which administration are you using to register Astrocast with the ITU?
Jordan: One option is to go through the Swiss administration but we are considering another option as well.
L-band satellite operators constitute an special club that doesn’t always welcome new members.
Jordan: We are using a small portion of L-band. We are targeting the very low end of the M2M market — small data volumes and low-bit-rate communications. That’s the beauty of the system. It has been fully optimized for that sole objective. To do that, we need only about 250 kHz, more or less — really a small fraction of the L-band spectrum.
Where are you in your funding?
Karlsen: We are completing a seed round. We’ve had what we call an extended seed round. We got early investments from local angel investors and we also got investment from one of our potential customers.
Over the past month we have secured a significant amount in the seed around and we are now in the documentation phase of that. We expect to close by the end of April.
And the seed round gets you to…
Karlsen: The seed round gets us to our demonstration missions next year, with the two launches. We have satellites that are under development and we want two separate launches so that we have a natural backup. One launch is under contract and we are working on a second. We don’t want to be caught waiting for a launch, so we want alternatives.
We have already received pre-commitments for the Series A round and we will begin the Series A funding round fairly close after the seed round is completed. The goal is to have that closed by the time we launch our two demonstration satellites next year.
You have a launch contract on India’s PSLV rocket for 2018 or with SpaceX on a Spaceflight-coordinated mission?
Karlsen: We can’t tell you but we have one in place and we’re working with another one. You’re not far off. When you come to market with just one cubist it’s hard to have much leverage. You need to go through one of the aggregators. We are also starting to talk to some of the newer entrants for when we start launching our constellation in 2019 — Rocket Labs and Vector and there are others as well.
Is a launch of at least one in 2018 necessary to preserve your license?
Jordan: No, it’s not related to the license. It’s really a demonstration and it’s fully supported by the European Space Agency [ESA]. What we are going to do is test the technology and involve two major pilot customers who are going to conduct tests on their assets, their equipment. This is also where we’ll learn a lot.
Is $50 million still your estimated capital cost of your full constellation?
Karlsen: That’s a good ballpark figure to get us through the launch of all 64 of our satellites. We’re doing the satellite construction in-house. Fabien and his team have built SwissCube-1, which is still operational more than seven years after launch. So we have a good period of testing and making sure the satellite lasts.
Our business plan does not anticipate our satellites lasting seven years. We are hopeful they will last three to five years.
What is your constellation’s intended orbit — assuming you have a precise choice from your launch-service provider?
Jordan: We want a polar orbit of course. As for the altitude, we are flexible but we would like to be between 500 kilometers-plus and 650 kilometers. This is also to respect the debris-mitigation and deorbiting guidelines from the European Space Agency.
An important point here is that we have on-board propulsion. We are going to use it not only to separate the satellites on their orbital planes, but also to do so collision-avoidance maneuvers as needed, and even at the end of life to deorbit if we still have capacity to do that. But in any case the constellation will deorbit before the 25-year limit of the guidelines.
SwissCube-1, launched in 2009, is at more than 700 kilometers — a problem given there’s no on-board propulsion.
Jordan: Yes, it’s going to stay up there for awhile. Once you’re over 700 kilometers you are definitely staying for more than 25 years. When we launched it, the 25-year guideline was not firmly in place. There is a project in Switzerland called CleanSpace1, to go grab SwissCube-1 and destroy it in the atmosphere. It’s the only Swiss-made debris and we’d like to take care of it.
What’s the goal of your June China tour, organized by the Swiss government?
Jordan: It’s just to give us more visibility and to present ourselves to some of the players in China. We were selected for this opportunity and we want to present the business case and see what comes out of it. For a startup like us it was a great opportunity. We have people in Hong Kong who work with us and we’ll coordinate with them.
What is covered by your funding from ESA’s ARTES telecommunications research program?
Jordan: It covers the entire demonstration. It started a month or so ago and covers the development of the satellites, their launch and operations during the demonstration program, and everything we do with our pilot customers.
Other types of [ESA] support can be put into place after the demonstration program for starting the commercial phase.
What are the technical characteristics of the satellites?
Jordan: It’s a three-unit cubesat of about 4 kilograms — a small shoebox. We have deployable solar panels. Most of the subsystems have flown already. Some of them, such as the propulsion, and attitude control and orbit determination systems, have also flown, for more than a year. These two subsystems we are not building, we are buying. The rest of the system is being designed in-house based on SwissCube-1 and other missions we have participated in.
Where have the propulsion and attitude control systems flown?
Jordan: We are buying the propulsion from NanoSpace, which is now part of GomSpace.
Satellite M2M/IoT is getting more crowded. Is your unique selling proposition your low cost?
Jordan: Exactly. We are going to be very cost-effective, first because we use nanosatellites and also because, on the ground, we use a very small, low-power terminal. These really make us different from the other projects.
So the key is our cost-effectiveness. It’s going to be very hard for the other players to reach our level of pricing.
Karlsen: You can’t go a lot in space for $50 million. We can actually establish an entire constellation for that cost.
Who owns the IP for your ground terminal?
Jordan: We have developed something on our own already but we don’t have the IP established yet. And we’ll be announcing a third party we will work with and we’ll have exclusive access to their IP. It’s an existing technology but we can’t provide more details yet.
ELSE/Astrocast wants to put an asset-tracking terminal on board each of these containers. Source: ELSE SA