NASA Raincube (Source: NASA JPL)

Old Space makes money moves for small satellite manufacturers

Aerospace titans Boeing and Lockheed Martin are spending big money to adopt and integrate small satellite “New Space” companies into their businesses.   Boeing yesterday, August 16, announced it is acquiring Millennium Space Systems while Lockheed Martin lead a second round of investors putting $38 million into Terran Orbital earlier in the month.

Small satellites are big opportunities and necessary assets for defense companies, as expensive, “exquisite” one-off large satellites are being replaced by lower-cost “disaggregated” constellations of smaller satellites that are tougher to disrupt and shoot-down in case of hostilities.  

The price tag for Millennium Space Systems was not announced.  Founded in 2001 and based in Los Angeles, the company builds a pair of small satellite platforms and satellite components, along with the ability to manage and operate them once in orbit. ALTAIR is a CubeSat-form-factor line of satellites from 10 kilograms to 200 kilograms, optimized for constellation use and to be built in 12 months or less. The larger AQUILA platform, weighing in from 200 to 2000 kilograms, is designed for larger sensors and higher bandwidth links and designed to be built within 24 months.

Boeing is acquiring a company with around 260 employees and a 70,000 square foot facility for designing, developing, building, and operating small satellites. Millennium’s publicly announced customers include numerous national security organizations, such as Missile Defense Agency (MDA), Office of Responsive Space, U.S. Air Force Space and Missile Center, DARPA and the National Reconnaissance Office.

Lockheed Martin placed its initial bet on small satellite a year ago through its venture fund, putting $8 million into Terran Orbital and reaching an agreement with Terran to essentially OEM its CubeSats as the Lockheed Martin LM50 satellite series. A few weeks ago, Lockheed Martin lead a $38 million Series B investment round in Terran Orbital joined by Goldman Sachs and Beach Port Capital.

Terran Orbital’s website could be used as a template for a stealth startup, listing only contact information.  Like Millennium, Terran Orbital has done extensive work with national security organizations, but also has announced some civilian government and commercial customers. GeoOptics’s CICERO weather data satellite, NASA Pathfinder Technology Demonstrator (PTD) missions and the RainCube mission, and ImageSat’s RUNNER earth observation imaging satellites are among the publicly announced commercial Terran Orbital projects.

Based in Irvine, California, Terran Orbital will use the proceeds from the Series B round for expansion, adding more staff and equipping a new 40,000 square foot facility designed to produce up to 150 small satellites per year.

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

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