SkySats in orbit
Illustration of four SkySats, built by Space Systems Loral for Terra Bella. Spaceflight Industries will launch multiple satellites for Terra Bella on a dedicated rideshare mission slated for launch in late 2017. Credit: Space Systems Loral

SAN FRANCISCO — Rumors began circulating in December that two leaders in the small satellite Earth imaging field were on the brink of deal, when employees of Alphabet Inc. subsidiary Terra Bella began visiting the offices of San Francisco-based Planet. Although the two companies have not confirmed an agreement, Bloomberg reported Jan. 9 that Planet was in talks to acquire Terra Bella, the Mountain View, California company formerly known as Skybox Imaging.

Since that initial report was published, industry sources have provided additional details, saying for example that Planet would gain approximately 80 Terra Bella employees with expertise in spacecraft operations and data processing, and that Planet would move imagery processing from the Amazon Web Services to Google’s Cloud Platform.

“Planet has no comment on unofficial reports of any deal,” company spokeswoman Rachel Holm said by email. Terra Bella did not respond to requests for comment.

The reported deal comes as a surprise to some Earth imaging experts because Google’s parent Alphabet acquired Skybox for about $500 million only two and a half years ago, saying the imagery would improve Google Maps and bolster its campaign to provide global Internet access. To investors, however, the move makes perfect sense because it would strengthen Planet’s product portfolio.

“Historically, if you look at companies that have been able to build leadership positions, they’ve done that by building monopolistic positions,” said Shahin Farshchi, partner at New York-based venture firm Lux Capital and an early investor in Planet. Farshchi said he had no knowledge of any Planet-Alphabet deal, but added that the companies’ products are complementary.

With about 375 employees working in San Francisco, Berlin, Amsterdam, Bellevue, Washington and Lethbridge, Canada, Planet currently operates 61 Doves, the firm’s five-kilogram cubesats, in addition to five 150-kilogram spacecraft the firm gained in 2015 when it acquired Blackbridge and its RapidEye constellation.

Terra Bella, a firm with about 125 employees has seven 100-kilogram satellites in orbit to provide high-resolution video and still imagery. In 2014, Skybox hired Space Systems Loral to build 13 satellites. Terra Bella plans to launch four satellites later this year on Orbital ATK’s Minotaur-C rocket and additional spacecraft on a SpaceX Falcon 9 rocket dedicated rideshare mission arranged by Spaceflight Industries.

Since it was founded in 2009, Planet has raised approximately $183 million, which brings the firm’s valuation to roughly $1.1 billion.

“Planet is not just raising money at high valuation, it is also generating very healthy amounts of revenue,” Farshchi said. “It’s showing you can build an interesting business as a private company in the space industry, which wasn’t possible before unless you were a government contractor. This may give other people the confidence and courage to do more in space.”

Debra Werner is a correspondent for SpaceNews based in San Francisco. Debra earned a bachelor’s degree in communications from the University of California, Berkeley, and a master’s degree in Journalism from Northwestern University. She...