Nanosat startup ELSE finalising seed round for US$50m Astrocast M2M constellation
Swiss newspace startup ELSE is close to securing seed funding for its 64-nano satellite M2M constellation AstroCast that will cost US$50m to build and launch.
Spun out of École Polytechnique Fédérale de Lausanne (EPFL) in Switzerland, the ELSE teams’ background is in civil projects including SwissCube, a cubesat launched in 2009 that is still in orbit today which was co-engineered by ELSE CEO Fabien Jordan.
ELSE was founded after Jordan moved, in partnership with ESA, to commercialise the technology for a low data satellite communications network.
On the business side, ELSE recruited Kjell Karlsen – familiar to many in the industry as the former long-time president of Sea Launch – as CFO and COO.
Despite its operations being based in Lausanne, Switzerland, both Jordan and Karlsen are based in Portland, Oregon as the company looks to tap VC investors on the US Pacific Coast for the risk capital that is in short supply in Europe.
It has raised US$750k so far in Europe, including from an anchor customer, and is now aiming to raise another US$1m before the end of the year amid serious discussions with several institutional investors.
The seed round will fund the build and launch of two demonstrator nanosats that it aims to place into a 600km sun-synchronous low Earth orbit in Q4 2017, although it has not decided whether one or both of the 3Us will be launched.
No decisions have been made on the launch supplier but a rideshare launch with SpaceX or India’s PSLV, or from a dedicated smallsat launcher such as Rocket Lab and Vector Space Systems are all of interest to the startup.
In mid-2017 ELSE plans to move into its US$6m series A round and close that by the end of that year. Close to 20% of the series A is already committed by existing investors and Karlsen is confident they will finalise it on time.
The CFO is working on the funding round with Chris Picone of Picone Advisory Group. The two previously worked together during Karlsen's time at Sea Launch when Picone advised on its restructuring.
The constellation is set to enter commercial service in late 2018 when it will place the first eight satellites, and they will have design lifetimes of up to five years.
AstroCast’s nanosats will provide low data M2M and IoT services, and Karlsen noted that it is far from the only company looking to do so. Indeed, Kepler Communications, JAMSS America, Magnitude Space, Terran Orbital, Helios Wire, and Blink Astro are just some of the other players out there.
“You may say that it is a crowded space, and it may be, but we can do it cheaper and more cost effective than the satellite solutions that are out there today,” Karlsen told SatelliteFinance.
“That’s because we can keep the cost down by building, designing and testing them ourselves, as well as the terminal, meaning we can keep the cost down.”
It plans to build the AstroCast nanosats entirely in-house, bar the propulsion systems that will be delivered by Sweden’s NanoSpace; recently acquired by GomSpace.
Despite its manufacturing capabilities ELSE has no plans to start building birds for others, like other startups such as Planetary Resources have done, instead preferring to put all its energy into developing its own constellation.
SwissCube was co-engineered by ELSE CEO Fabien Jordan. Photo credit: EPFL
ESA is supporting ELSE through the ARTES programme and it has secured investment from the Swiss government and private and institutional investors.
One investor is a French water meter company that is an anchor customer. Once the first satellite is up, the anchor has agreed to take 1000 terminals to monitor its water meters in the Middle East, which will also enable ELSE to do full testing.
Gamaya, which operates agricultural monitoring drones, is also interested in the technology to keep track of its UAV fleet.
Once it has a scaled network with lower latency, ELSE envisages AstroCast being focused on mobility. The second generation of its terminals is being designed to be the size of a stamp and can be put in cars, trucks, or heavy machinery, to provide monitoring in very remote areas.
Using L-band technology keeps the antenna small, although ELSE is yet to secure the frequencies AstroCast needs.
It is discussing spectrum rights with several companies that have L-band and one option is to find a strategic partner in that sphere with spectrum that could in turn benefit from the AstroCast system to offer complement services.
Another option would be to lease capacity from L-band operators such as Inmarsat, Thuraya, and Globalstar, and others with smaller licences.
A last resort would be to go through a governmental agency, but ELSE would preferably avoid going through such a time-consuming process.