National Post (National Edition)
Kepler raises US$16M for satellite launches
Ultimate goal is orbital spacecraft
• Kepler Communications Inc., a Canadian satellite company that provides telecom services at the Earth’s poles using breadbox-sized satellites, plans to launch more than a dozen additional nanosatellites in the next two years after securing a second round of financing.
The Toronto-based startup announced Monday it has raised US$16 million in a Series A round of financing led by Costanoa Ventures with investments from Deutsche Bahn’s Digital Ventures and IA Ventures.
The money will go toward Kepler’s ultimate goal of launching a constellation of 140 Low-earth Orbit satellites (LEOS), smaller spacecraft that will orbit about 575 kilometres above Earth. The shorter distance enables lower latency connections than geostationary satellites, which orbit some 35,000 km from Earth.
“This is going to make a big impact,” Kepler’s chief executive Mina Mitry said in an interview last week.
So far, with seed funding of US$5 million, Kepler has one satellite in orbit. It launched in January and already provides data services to icebreakers, oil tankers, tourism companies and scientific organizations that operate at the poles, where demand for bandwidth is expected to increase as warmer temperatures lead to a rise in tourism and shipping.
Kepler offers speeds of 40 megabits per second — 10 to 40 times faster than speeds offered by satellite providers in polar regions.
“For the first time we are able to send massive files like operational data, scientific data, videos or photos,” according to a statement from Kepler customer Thomas Liebe, chief operator of Polarstern, an icebreaking vessel from F. Laeisz, one of the world’s oldest shipping companies.
“These are bandwidth intensive and we have no other way to send the data if we used traditional systems,” he said.
Kepler’s seed funding covered the cost of two more satellites, the next scheduled for mid-november launch and a third in the second half of 2019. (It costs about $200,000 to launch a nanosatellite, a fraction of what it costs to launch a traditional satellite.) It also paid for two Earth stations, one in Inuvik and one in Svalbard, Norway. A third is underway in New Zealand.
The second round of funding will enable it to launch up to 15 additional spacecraft by the second quarter of 2020. Kepler also plans to double its head count to 40 employees and move into a new office in downtown Toronto.
Every incremental satellite improves service quality and network capacity, Mitry said. Plus it’s critical to have redundancy in an exceptionally challenging operating environment.
“Space is hard … you can’t send a repair man,” Mitry said.
The first satellite has been operating for almost a year with no drastic malfunctions (“Knock on wood,” Mitry said). All troubleshooting must be done using software, requiring engineers to be creative.
“You can do tons of creative software. That’s the No. 1 thing we’ve had to do.”
Kepler is one of many companies trying to win big in the emerging LEO satellite market. The pace of change in the satellite services sector is accelerating thanks to advanced frequency re-use technology and the miniaturization of electronics, according to a September report by Moody’s Investors Service.
“We expect that the fixed satellite services market will be increasingly disrupted during the next five years,” analysts stated. They expect demand for satellite network capacity will increase with the rise in data traffic, but say the timing and monetization isn’t yet clear.
Telesat, Oneweb, Spacex and Iridium are all competing in the LEO satellite space. But Moody’s hasn’t picked winners or losers since it’s not clear which technology is the best.
Mitry contends that Kepler stands out since it has proven it can provide service even with only one satellite in orbit. Its ability to attract customers, and its high throughput service, spurred Costanoa Ventures to invest, according to a statement from Costanoa’s founder Greg Sands.
“We are uniquely excited by Kepler as compared with all the recent nanosatellite communication companies because they have demonstrated that their satellites are filling global gaps in connectivity,” Sands said.
SPACE IS HARD ... YOU CAN’T SEND A REPAIR MAN.