Disruption in space – an update

| February 8, 2016

The space industry is growing rapidly, with startups and established companies taking advantage of the disrupted sector. Jason Held from Saber Astronautics wants to know if Australia is ready for the democratization of space.

In a previous blog I introduced the potential for CubeSats as a disruptive force in the space industry and what this means for Australia. CubeSats have great potential to provide data services in arenas normally set for much larger players but have only recently become commercially viable.

With the costs of a satellite decreasing from hundreds of millions to hundreds of thousands, this affects all of us. Imagery from space is used in agriculture, mining, and driving environmental decisions. Communications and other data from space is used in banking, logistics, and is a future driver for Internet of Things.

So it’s a good time to reflect a bit on what has changed since my last post in 2014. If space is truly under disruption, you should see a growing list of companies taking advantage of the new conditions. New companies, established companies, governments, and downstream users (*that’s us*) will all have a chance to benefit.

Is this happening? The imagery market is clearly under pressure. Companies like PlanetLabs are launching between 50-100 satellites per quarter, with enough pixel resolution to count cars in parking lots. Not to be outdone, SkyBox, a microsatellite company acquired by Google, is offering their imagery for free in an attempt to gain share. More exotic ideas ranging from Bitcoin CubeSats to asteroid miners have also been successful in raising funds. Space startups are forming in Silicon Valley, Tel Aviv and Moscow amongst others. The UK invested 500m Pounds in entrepreneurial support aiming to capture 10% of this market. The CubeSat market is well on its way to exceeding $2Bn by 2020. Not a bad start.

In far more conservative Australia we are also seeing nearly two dozen new space companies founded from Sydney to Adelaide. Nearly half of them received seed funding just over the last two months. As a snapshot, consider what is happening *without* government support:

  1. Three satellite-STEM companies entering the market by selling CubeSat kits to schools. One company has a launch next year so your kids could test their own software in space.
  2. Two satellite communications companies in Adelaide are creating low bandwidth data at a fraction of the cost of providers like Globalstar.
  3. Four companies providing support services, ranging from CubeSat avionics suppliers, software support, and space operations.

Do you detect a theme? The term “democratization of space” is where the general public gain common use and the road is owned by smaller upstarts rather than larger established players. The seed is planted and several Australian Minimal Viable Products are manifested for spaceflight next year.

So what’s next? It takes a few years to grow from a gaggle of startups into a local Australian economy, so they will need incubation and regulatory protection. Expect to see some pushback from US suppliers who will lose money when we start buying locally. We are seeing this already with aggressive plays from US CubeSat providers to take Australian market share before we grow our own, as well as early grumblings from top primes.

It’s now 2016 and again I ask – are we ready?