Britain leading the new space race
Nano-sats, cube-sats – and 3 new funds send small firms into orbit
BRITAIN’S satellite firms are counting down to a launch that they expect will mark a key milestone in the industry’s astonishing expansion.
But this time there will be no rocket on the launchpad. And instead of scientists, it will be private investors watching nervously as a dedicated private equity fund aimed at backing start-up space firms boosts the industry into the centre of the business world.
The fund will be launched by Seraphim Capital in October and is being backed by investors including Airbus, which already has a presence in the space industry through its ownership of Surrey Satellite Technology, one of the world’s leading small satellite makers. It will be followed by two more funds later in the year.
The UK Space Agency believes that British space firms have previously missed out on creating world leading companies because of a risk averse attitude towards the industry in this country.
Chris Lee, head of international space policy at the agency, said: ‘We’ve seen what’s happened in the US. A number of firms have started from absolutely nothing to become dotcom-type projects.’
He cited Skybox Imaging, which puts satellites into orbit and was bought by Google for $500 million (£300million), and Planet Labs, a California-based business which he said now looks a tempting takeover target. ‘What they were offering we could have offered in the UK,’ said Lee, arguing that there is no reason why we could not have had a similar financial buzz around Clyde Space, a Scottish specialist in spacecraft systems known as nano-sats and cube-sats.
‘The technology that Planet Labs is using is exactly the same as what we’ve funded with Clyde Space over the years.
‘The difference is the appetite for risk is greater in the US than it was in the UK. Clyde Space would not have had the opportunity to raise investment capital from the City in the same way that they can raise money from the West Coast or from Boston.
‘Now I’m told that the UK has a strong venture capital community. It just isn’t yet geared towards this sort of space technologies.’
The launch of Seraphim’s fund could be an indication that this is about to change. It aims to bring together public and private investment to boost companies using space-related technology. The industry is already substantial. The UK makes up 7.7 per cent of the global space economy, with a turnover of £11.8 billion a year.
Britain’s space sector employs 37,000 people – including some of the UK’s most qualified workers – and supports 115,680 jobs.
Innovate UK, the Government agency set up to find and drive technology innovations that will grow the economy, said productivity in the space sector is three times the UK average and exports are worth £3.6billion a year. Last week Innovate UK took nine
entrepreneurs on its first ‘Space Mission’ to the US with the support of UK Trade & Investment, as part of Britain’s bid to reach 10 per cent of the global space industry.
Companies on the trip included firms offering high quality Earth observation to consumers for the first time, something it bills as ‘selfies from space’.
Chris Brunskill, co-founder of Bird.i, one of the nine Space Mission companies, said of the Government’s target for the space industry: ‘It’s very ambitious. But the reason that exists is to build that momentum from a very objective point of view.
‘I think the UK, of anywhere, is capable of doing that because we have this commercially focused objective.’
The expectation of a rapid increase in the number of satellites – and smaller, low-orbit satellites in particular – is seen as a good opportunity for satellite makers in Britain.
Mike Lawton, founder of Oxford Space Systems, another of the com- panies on the mission, said: ‘There are roughly 2,500 registered satellites orbiting the Earth and this is set to treble in five years.
‘And that growth is going to come from, predominantly, this huge explosive growth in this low Earth orbit – these microsat platforms – because they’re so much cheaper now to make. So there lies the commercial opportunity.’
The dramatic increase in availability of commercially useful data is the key to growth for many British companies. Jenni Doonan, head of business development at Clyde Space, which was exhibiting at a satellite conference in Utah, said: ‘The interesting thing at the moment in the UK for start-ups is data, and all the different ways you can use data gathered from space in non-space areas.
‘You can use the data to manage the water supply, or farming and agricultural businesses, for example.
‘There’s now so much data available that if start-ups can think of innovative ways to apply that data, sell it as a service, then they can grow the business quite quickly.
‘Cube-sats can really help because they can be designed and launched within two years.’
She added: ‘For more traditional spacecraft, it can take 10 to 15 years from the first time you had an idea of having a large spacecraft, to developing it and launching it and making it work.
‘So now when people want things to happen quickly, cube-sat is going to really service that market.’
The space industry is becoming rapidly commercialised, and it is small firms that are set to capitalise on opportunities, now that investment is coming in from private companies and individuals, and not just governments.
Patrick Wood, group managing director of Surrey Satellite Technology, said: ‘We’re very well positioned because with organisations such as Innovate UK people understand that the UK is pushing high technology and they’re also trying to do it in a way that’s very commercial.
‘They don’t just give grants to support companies, they actually want to understand what the business case is.
‘So when companies then compete on the world market they’ve actually got a better business case.’
The most famous name in space is still Nasa, but even here British expertise is playing a part.
Anthony Freeman of Nasa’s Jet Propulsion Lab, which describes itself as ‘the leading US centre for robotic exploration of the solar system’, said: ‘We have good ties with Surrey Satellite Technology.
‘It has been involved in several space missions with us to date and we hope in the future too.’
But he also said Nasa’s Jet Propulsion Lab traditionally partners more with Germany and France.
That is a tradition that British space firms are determined to change.