Phase Four Chief Executive SImon Halpern. Credit: Phase Four

PARIS — Whether it’s mission requirements as smallsat applications expand, or regulatory requirements as space traffic management and collision avoidance emerge as issues, smallsat propulsion is hotly competed market now.

Some customers apparently don’t require an in-orbit demonstration before making orders, which may help explain why startup satellite electric propulsion companies tend to mumble when asked to identify customers or backlog figures.

Phase Four is one of those. With an interesting AIAA paper, an Aerospace Corp. testing program, a NASA order and a DARPA contract under its belt, Phase Four says it’s booking orders for a technology that scales from larger cubesats to geostationary-size communications satellites.

Phase Four Chief Executive Simon Halpern, with a background at Ball Aerospace, Northrop Grumman, the Aether high-altitude balloon company and Spire Global, is not new to the sector. His company was founded in 2015.

Which niche is your thruster technology best adapted to?

The sweet spot for our technology and our product is in fact the mega constellations. So let’s use OneWeb as the example, or Telesat’s LEO. They’re trying to mass produce the spacecraft, but you have to mass produce all the subsystems that go along with that. Our system has essentially built-in mass manufacturability. For an electric propulsion system it’s actually simple — very few parts, easy to design, easy to iterate and relatively easy to manufacture at scale. Put those things together and you end up with a system that provides the exact performance that’s required by those mega constellations.

You can put 2-3 of your units together on a single platform for a larger satellite?

That’s correct. Our system is scalable in terms of we look at power input. A cubesat will have a small amount of power to provide to the engine, and a [150-kilogram] OneWeb-type satellite would have significantly more power. And it’s basically a series of levers you have to push and pull to define the traits.

You have to assume that not all of these mega constellations will work, but just look in the last few years how many more have been declared, how many more have won their FCC license, and are starving to do things and are actually raising that money and are actually building satellites.

So you’re not focusing on the narrowband systems with smaller platforms built by companies like AAC Clyde or GomSpace?

The beauty of our system is that you can shrink it down to something as small as a cubesat. So companies like Clyde, Blue Canyon, Tyvak, those companies and others like them building cubesats actually need meaningful propulsion once they’re in space. There’s some options from other companies providing propulsion for smaller satellites, but they tend to be extremely efficient at the expense of thrust. That translates into time wasted maneuvering and firing your engine.

We all know time is money. If it’s going to take you 10 days to do something with another system or one day to do something with ours, then we just bought you back nine days worth of revenue-generating opportunity.

Think about a wireless charging mat for your cell phone or your cell phone itself. Our architecture is basically that size. In other words, it can be built on a very small scale for the cubesat world but scales up very smartly and efficiently and cost effectively for something a bit larger, like a OneWeb constellation.

For the moment, the smaller satellite constellations are moving forward faster than the mega constellations. Can you get down to a 3u cubesat?

That would be about the smallest size that would make sense for us. The engine works as a function of power. The more power you can give us, the more thrust, the more efficient the engine operates. So while we’d be happy to offer this for a 3u, a 6u or 12u would offer enough power that we start to get very interesting.

A Phase Four thruster during testing. Credit: Phase Four

And if you look at some of the large constellations of cubesats, some of them aren’t talking about 3us anymore, they’re talking about larger sizes.

There does seem to be a move on the commercial side for slightly larger cubesats.

Cubesats aren’t going away. There are different growth curves and different projections as a function of launch vehicle availability, so it’s probably somewhere in between the extremes. But compared to 5-10 years ago, the speed at which you can innovate on a cubesat today in terms of the signals, the links, the power budget, all these kinds of things are moving incredibly fast with cubesats.

Even for the smaller ones, at some point regulators may require on-board propulsion.

No matter how you slice it, a cubesat with an active collision-avoidance mechanism — not a passive mechanism like differential drag, which is what a lot of cubesats use, but an active system offers more maneuverability — will be needed. We all have a collective responsibility here — people like us building propulsion systems and people building cubesats and larger.

We’re board members of the Commercial Smallsat Spectrum Management Association. It deals mostly with our customers’ issues like FCC frequency allocation. But as a part of that process you also have to prove you can deorbit within the 25-year rule if you’re in low Earth orbit. We’re providing input to the FCC and other regulatory bodies to let them know that there are things like what we have out there.

Back to your product: Are you going to launch on an Astro Digital proof-of-concept satellite this year?

We’re going to get back in touch with you on details in the coming weeks on that one.

When do you expect to have a demo in orbit and how important is in-orbit demonstration to you?

Astro Digital and NASA are two of our customers. We have not put anything in space yet and we have a number of interested parties focused on when we can deliver the product, the type of performance that can be delivered — those types of things.

Targeting a market of larger cubesats to mega-satellite broadband constellations and heavier. Credit: Phase Four

With these customers, the conversation isn’t really about when are you getting to space because we can simulate space on the ground, and put things into our own vacuum chamber. We can run a number of tests and actually characterize the engine much better on the ground because you can obviously instrument it much more significantly than you could in space.

The mega constellations like OneWeb are a little closer to more traditional space where typically the first time a new propulsion system is flown is on an operational mission. I’m not going to build, for testing, a OneWeb-size satellite and pay for the launch and for the satellite. That doesn’t make any sense for us as a business.

So getting something orbit isn’t a sine qua non for business development? Some customers might require an orbital demo but others don’t?

The laws of physics don’t change from the surface of the Earth to in space. And the most intelligent customers realize that and understand the difference between the warm fuzzy of going to space and the rigorous testing you can do on the ground.

What do you need to do before you and customers agree this is ready for primetime?

Some are already making purchases.

You have customers who have made purchase orders? How many have you sold?

We’re not at liberty to discuss the exact details because of customer confidentiality.

Not even total backlog?

It’s important to remember where we are as a company and a technology. So the earliest customers are providing us significantly important data when they do eventually put our product in space. As a result, they receive the early-adopter-type discount. On the other side of things look at what the Airbuses, the OneWebs of the world are targeting as the price of their entire spacecraft. We know we can meet the price-points they require in those OneWeb-type constellations.

What are the Rider and Maxwell products?

A: Rider is our first cubesat product, a cubesat propulsion system, not just the engine but also the fuel management system, the power processing electronics, the engine controlling electronics, etc. Maxwell is our smallsat product targeted at constellations like OneWeb, the larger, more powerful engine.

You don’t see OneWeb launching 100 satellites a month today, but you can draw some reasonable curves as to when they will be launching that number. The same thing goes for the cubesat constellations. The folks we’re talking to, the constellations that they’re bidding on or starting work on, as those evolve our product will be able to meet the needs both in terms of the performance and price points required, and the numbers of units delivered per month.

OneWeb is launching its first 10 satellites this year. Isn’t that design already frozen or are you talking about their eventual second-generation system?

That’s correct, it’s the second iteration. We have moved into a larger facility to start ramping up production levels for these constellations.

Will you scale up your ability to make your own stuff or outsource it?

A: We are in the process of those trades. It changes for different products. When we’re talking about the cubesat product, you’ve got a fuel-management system that is small and self-contained, and then the engine. Our secret sauce is in how we generate and manipulate and accelerate plasma. We don’t need to reinvent the wheel when it comes to moving fuel from a tank to an engine. Those types of things we look to outsource.

And because of the price points people are requiring, you can’t go to your typical aero- or space-grade folks for some of the special parts, special valves and regulators. You might need to consider looking in similar, but not quite as expensive, industries — like medical devices — where you’ve got high-reliability valves that can survive in very harsh environments but also can be built at scale and be very reliable for long periods of time.

I am looking at your seed-round funding…

What’s online doesn’t reflect everybody who’s participated. We’ve got a handful of investors. The seed round was led by Alsop Louie Partners. Others who participated include Dolby Family Ventures and the University of Michigan Endowment – MINTS – and smaller investors like Wolverine Angels, another Michigan alumni group, and Green D Ventures, a Dartmouth alumni group, and a couple of others.

That was all part of the seed round?

We had a multi-stage seed round — a little bit of money at first, and then, upon hitting certain milestones, more money agreed upon.

What’s the total financing so far?

That I’m not going to reveal.

We looked backwards at some of the technologies used for in-space propulsion, electric propulsion systems like Hall thrusters or ion engines. They’ve been around for many years. If you look at all the money that’s been spent on these technologies just to get them to the point where then there’s a spinout a decade later and then a number of millions raised to put the prototype in space, you’re in the $10-20 million dollar range.

We’ve spent well under $10 [million] so far, including $1 million from DARPA and essentially only about a year’s worth of university research done on our system. That might provide a better proxy for just how capital efficient a system like ours can be.

When are you likely to be more open about customers and financing?

When things start moving around in space on their own platforms, that’s the point at which they’ll be willing and able to talk. There’s a competitive advantage to not letting the world know what you’re doing and what your capabilities are, especially as we go from a defense- and government-focused industry to a really commercial industry.

We’re trying to end up as part of the war chest of options our customers can use, whether it’s their cubesats, small sats or something else, a larger spacecraft.

So if the mega constellations don’t materialize as expected, you can migrate your business easily to the smaller satellite side?

We’re selling a system that is scalable from cubesats all the way up to the largest geo comsats out there today. Regardless of whether any one of those industries or segments goes away, we still have potential customers that exist today looking for better, faster, cheaper options.

The most recent AIAA paper helped back up our pitch for the mega constellations. And so it’s not just about the tech, it’s also the cost and delivery timeline that we can achieve help them support their bids to their end customer.

Do you believe several of these broadband constellations will reach full deployment?

At lease one of them will become a fully operational constellation in the next few years.

What production volume do you need to reach profitability, say for the cubesat product?

There are a number of levers you can turn in terms of pricing and so forth, and at our target price point, it’s less than 100 units to get us in a good spot. For the larger Maxwell product, that number still getting worked on. At least one of these mega constellations will come into existence and they’ll probably choose a primary propulsion provider and maybe have a backup. We need to be onboard with at least one of those constellations as a primary. With one we’re good, and two is worth twice as much as one.

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Peter B. de Selding
Peter B. de Selding
Peter de Selding is a Co-Founder and editor for SpaceIntelReport.com. He started SpaceIntelReport in 2017 after 26 years as the Paris Bureau Chief for SpaceNews where he covered the commercial satellite, launch and the international space businesses. He is widely considered the preeminent reporter in the space industry and is a must read for space executives. Follow Peter @pbdes