Story corrected on February 21 to reflect confirmation of US dollars in press release
UK-based Sky and Space Global (SAS) has raised $12 million of a planned $15 million fundraising effort. Funding will be used to launch the first batch of 200 nanosatellites in an equatorial “belt” around the world to support voice and data services. The company expects to begin generating revenue from late 2019, according to its February 20 press release.
SAS’s “Pearls” constellation will deliver low-cost voice, data, instant messaging and Internet of Things (ioT) communications to underserved communities around the Equator with the belt extending between 15 degrees north/south for narrowband voice and 18 degrees north/south for data services, according to initial information distributed by the company.
An additional $3 million dollars will be raised in a second round as a part of the private placement, bringing the total to $15 million with the potential to add another $1 million based upon investor demand. Funding will be used for capital expense payments to suppliers, completion of first launch activities, operational working capital and general admin expenses.
Launch of the first 16 Pearl 3U satellites is expected to take place in mid-2019 using Virgin Orbital’s LauncherOne vehicle. SAS says current annualized revenue based upon contracts is “conservatively estimated” between $7 million to $8.6 million. The company plans to use the contracts to obtained debt-based financing from U.S. banks for additional capital.
What isn’t clear from the release is how many Pearls can be packed onto a LauncherOne in the future. At a list price between $10 million to $12 million per launch plus the cost to build cubesats, SAS will have to raise more money to build more cubesats and conduct multiple launches to finish its initial constellation of 200 satellites. SAS is likely paying less initially as a first customer of Virgin Orbit and would also get discounts if it has committed to multiple launches.
Expansion outside of its current equatorial belt will require more capital to build and launch satellites into inclined orbits capable of covering North America and Europe. Moving into those markets puts SAS into competition with ow-cost, low-volume data, low bit-rate (L3) IoT providers such as Hiber and Swarm Technologies, pricing at a few dollars per device per year.