Swarm lands $25 million venture round for satellite IoT network

Satellite IoT startup Swarm Technologies announced it has secured $25 million in venture investment today.  Leaders in the Series A round include Craft Ventures and Earthlink/Boingo founder Sky Dayton.  Swarm hopes to launch 150 of its Texas toast-sized satellites in the next 18 months to provide global, low-cost IoT services.

“Swarm is turning the satellite industry on its head,” said Sky Dayton in Swarm’s press announcement. “Others continue to focus on high bandwidth networks that are very expensive, power-hungry, difficult to integrate, and will take years and billions of dollars to bring online. Swarm has developed something entirely new: a low-bandwidth, latency-tolerant network that is extremely inexpensive, low-power and very easy to integrate for things that need to be connected anywhere in the world—and Swarm is doing it in a tenth the time of a traditional satellite network build.”

Other participants in the round include Social Capital, 4DX Ventures and NJF Capital.  Swarm will use the money to “accelerate software and hardware integration for customer deployments,” according to the company’s press release – earlier this month Swarm was hanging out with Ford at CES – hire more staff and deploy the aforementioned constellation of 150 satellites.

Swarm CEO and co-founder Sara Spangelo said Swarm’s low-cost technology has “caught the attention of dozens of companies” including Fortune 100 enterprises and conducted successful pilot tests in agriculture, maritime, ground transportation, and text messaging services.   Swarm says its’ tech will lower the cost of an 250ish character data packet down to a penny, with a service cost per device coming in at $3 per month.  In combination with an under-$250 ground station hub to connect multiple devices to a satellite data link, Swarm could make long-distance IoT data collection affordable for a much wider set of businesses and organizations.  

Example IoT applications Swarm cites include diagnostics and emergency messages from connected vehicles (see CES/Ford), agricultural sensors and smart meter reporting in areas outside of cellular range, shipping containers and asset tracking across oceans, water monitoring devices in remote African communities, and text messaging in rural and remote areas.

Swarm has a total of 7 satellites in orbit operating under a Federal Communications Commission (FCC) temporary operational license; the first four launched at the beginning of 2018 were launched without FCC permission, resulting in an investigation revealing a number of regulatory violations.  The FCC has imposed a fine of $900,000 on the company and requires it hire a regulatory compliance director, among other steps.

Ironically, Swarm’s biggest problem now is the FCC not doing its job.  The government shutdown means Swarm cannot negotiate terms on how it will pay the $900,000 fine to the FCC while the agency can’t process Swarm’s December 2018 license application to launch the 180 satellites.  The FCC is likely to scrutinize all Swarm’s paperwork in the near future, given past violations.

Swarm has raised $28 million to date, with the latest cash infusion moving it beyond the basic “Raise up to $5 million, launch a couple of satellites, start trials” phase and into large scale deployment. Potential satellite IoT competitors to Swarm include Astrocast, Fleet Space Technology, Helios Wire, Hiber, Kepler Communications, Sky and Space Global and various others, depending on the day of the week and business model(s) being touted.

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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