When Payam Banazadeh and his team founded Capella Space in 2016, their vision was to bring a wealth of new data to the private sector that they could use in a variety of ways to create business opportunities and improve efficiency.
Four years later, Banazadeh is still waiting for this commercial opportunity.
Capella is still successful. The company managed to raise $ 82 million in venture capital funding and has a solid pipeline of government contracts, but Banazadeh hasn't seen private industry adoption.
He's not the only one.
Banazadeh spoke at TC Sessions: Space 2020 among a range of executives including Peter Platzer, the Chief Executive Officer of Spire Global; Rafal Modrzewski, co-founder and CEO of ICEYE in Helsinki; and Melanie Stricklan, Founder and Chief Strategy Officer of Slingshot Aerospace; who have spoken about the central role of government in the current space business and how they hope this will change.
“I think regulation in the US has improved a lot over the past year. However, the challenge is always how to balance national security concerns and ensure that the US industrial space can keep up with the competition internationally, ”said Banazadeh. “I think we have to … take a leadership position in the US… to not only limit US companies to following the activities of international corporations, but to allow US companies to go beyond and capture more of the commercial market by being able to provide some of the more advanced features [that they have] on the government side. "
"When we started ICEYE, We kind of got the impression that the idea behind new spaces and things we do is really, to allow observations to make the world better … To improve business efficiency, monitor climate change, and do all of those things what we couldn't before, ”he said. “And when I look at the fundamental democratization of data and the handing off of the best available functions to commercial industry as well as government, it is ultimately correct because they are users of the same supply chain. I see you know the biggest factor that is currently stopping development is the national approach to certain activities. I think the more global we approach the market, the wider the competition, the less restrictions affect us. It seems to work much better for everyone as a global community if we allow these companies to work together and share data freely. So if there was one wish I had for 2021, it was to have fewer boundaries and more open markets to share data with. "
Governments are already massive customers for most of these companies. According to Statista, government spending makes up around half of the total of 423 billion US dollars that has already been spent on the space industry.
However, if the industry is to generate the potential $ 1 trillion in revenue Morgan Stanley plans for businesses over the next 20 years, more needs to be done to unlock the private sector.
“When we started the company, we saw an immediate opportunity in the commercial space. And as we dug a little deeper and made some strides, we found that the commercial market is still not as mature as we'd hoped it would be. In the meantime, we quickly realized that the government market of both the US government and international governments is growing and growing much faster than before due to the new challenges and challenges and threats, especially for this type of data that is the one around the corner ” said Banazadeh. "And so we have focused on helping governments meet their needs. We want to go back to business, we have that claim." And that is our long-term goal. We just think we will probably be traveling a couple of years to get there. "
While the commercial market may not have materialized to the extent these entrepreneurs would have hoped, there are still opportunities for numerous government-commissioned deals, in part due to the increasing complexity of space operations.
That means big business for companies like Slingshot. This provides what Stricklan calls "situational awareness".
"Whether in orbit or on earth, we give our customers answers about their risks and how they can mitigate this risk or at least understand the risk in relation to spatio-temporal information," said Stricklan. "And right now … your data [and] your most important asset to get that data. You have to have your satellites in orbit and you have to have flight safety and all these different things."
The skyrocketing number of satellites in orbit and the presence of nearly 500,000 space debris mean that these very expensive assets are at greater risk in operation than they were. Slingshot seeks to solve this problem by informing its customers of potential risks and providing data processing capabilities to understand the terrestrial risks that businesses face.
Everyone from insurance companies to logistics providers to financial investors uses satellite data and images to make decisions. A growing driver for all of these companies, according to Platzer, is an opportunity to model the effects of climate change.
“I think, I think, the demand for a global understanding outside of the planet, in order to use its resources effectively and responsibly, is undiminished. You know, sweat in particular, you know the effects of climate change on every single company in every single country because of the weather, because every single person is definitely not going to go away. And that means the demand is increasing, ”said Platzer. “To be honest, I mostly see opportunities, almost exclusively, and not necessarily obstacles. Financing in the industry grows by 46%. Year for year. Business start-ups are growing by 32% from year to year. I think I think it's really a very, very dynamic time that is dominated by opportunities rather than obstacles, I would say. "
Startups will be able to take advantage of these opportunities, especially if they can get a boost from government agencies that highlights the areas where business opportunities arise and leaves the private sector to pursue them, Modrzewski said.
Still, the panellists agreed that there is no better time to start a company focused on the space industry than now.
“If I could encourage those with any kind of inspiration to start a business in space, just do it. Carry out this vision but understand all of the things we talked about today that are different from the risk of starting a marketing company or these different things. So rise to the challenge of understanding government as part of it and understanding rules and regulations, as well as outside government, that affect how we fly satellites, how we care about satellites, how we provide data, and understand that there's a lot of legacy that comes with this industry, ”said Stricklan. “I think the global space ecosystem is one that remains very isolated. It's not like the digital transformations in Silicon Valley. In the past 10 or 15 years. This industry still needs this digital transformation and the world is your oyster, but be prepared and rise to the challenge. "