Start-up satellite imaging operator Skybox Imaging has raised US$70m in a third round of financing that will be used to fund the construction and launch of its first two high-resolution imaging microsatellites, SkySat-1 and SkySat-2. Venture capital…
Start-up satellite imaging operator Skybox Imaging has raised US$70m in a third round of financing that will be used to fund the construction and launch of its first two high-resolution imaging microsatellites, SkySat-1 and SkySat-2.
Venture capital firms Canaan Partners and Norwest Venture Partners led the funding round with existing investors Khosla Ventures and Bessemer Venture Partners also participating. Skybox has raised US$91m in private funding since its formation as a spin-out of Stamford University in 2009.
SkySat-1, which Skybox has designed and manufactured itself, is currently slated to launch in fourth quarter of 2012 aboard an International Space Company (ISC) Kosmotras Dnepr rocket.
Skybox CEO Tom Ingersoll said that in addition to funding the debut satellites, “We will also use this capital to expand strategic alliances, position Skybox for initial commercial operations, and to accelerate the development path towards the full constellation of microsatellites. Canaan Partners’ and Norwest Venture Partners’ commitment to the Skybox vision gets us one step closer to reaching all of these milestones.”
Skybox’s business plan centres on operating a coordinated constellation of imaging microsatellites that will deliver high resolution imagery and video of any spot on earth multiple times per day rather than sporadically like the existing earth observation providers. The company hopes that by combining this with data mining and analysis software, it can sell to previously untapped commercial markets such as financial trading, insurance and telecommunications.
Deepak Kamra, general partner, Canaan Partners, who will be joining the Skybox board, said: “Imaging satellites have the potential to deeply impact the day-to-day experiences of both businesses and consumers. Until now, only governments and militaries have been able to use the valuable data gained from analyzing these images. With this analytic capability now becoming available and affordable to mainstream users, we can expect to see a dramatic and permanent shift in how business and consumers operate.”
Whether this will prove to be the case remains to be seen. One SatelliteFinance source questioned where the demand for such services will come from. “The demand for data in the US is very defence orientated, Skybox are targeting the information services, Google type platform to serve a mass market. But demand for that, although growing, is not high at the moment. If we look at the data supply to such platforms to deliver the services then this market is not huge, I would doubt its more than US$50m,” the source said.
“Furthermore the refresh rate they will eventually offer if the constellation is in place would be very high, but Google/Microsoft only require recent imagery and don’t have to keep purchasing data. The high refresh rate is required more for constant monitoring/surveillance applications, particularly defence. So I imagine defence will play more of a role for them in the end…if the system’s data is up to spec.”
Skybox’s established peers, such as GeoEye and DigitalGlobe, have heavily relied on defence contracts to run their businesses with the National Geospatial-Intelligence Agency’s EnhancedView contributing around 75% of their revenues. Indeed, the earth observation operator that sought to build their business through commercial contracts, RapidEye, was forced to file for bankruptcy protection in June 2011.
“RapidEye for me made the mistake at the start of trying to offer end services rather than data, just selling the data came more as an afterthought and they didn’t have distribution in place. Now they’re building the distribution into a grid type platform for ease of dissemination and it will be interesting to see how it develops,” the source commented.
