ÅAC Clyde looks to constellations as future of business

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WASHINGTON — ÅAC Clyde, the company being formed by Sweden’s ÅAC Microtec and Scotland’s Clyde Space, says its primary business is shifting from satellite subsystems to constellations as smallsat operators begin fielding more satellites.

“It is really important that we continue our subsystem business, but the future for us is in delivery of constellations,” Craig Clark, founder and chief strategy officer of ÅAC Clyde, said in an Aug. 28 presentation at the financial advisory firm RedEye.

About half of ÅAC Clyde’s revenue comes from spacecraft parts, such as power units, onboard computers and solar panels, he said, but around 70 percent of industry-wide smallsat demand is projected to come from constellations. ÅAC Microtec completed its $35.3 million purchase of Clyde Space in January. The combined company builds satellites ranging from 1 to 50 kilograms in size.

Many of ÅAC Clyde’s customers have been national space agencies, large companies including Raytheon, Airbus and OHB, and academic institutions like MIT. More recently, startups like Kepler Communications and NSLComm, which both have plans for global cubesat constellations, have purchased prototype spacecraft from ÅAC Clyde.

Clark said future customers are unlikely to be familiar with the space industry, having the end goal of just wanting the data satellites can obtain. As a result, ÅAC Clyde is pursuing a “satellite as a service” business model where it handles everything from mission design through building, launch and operations.

“The traditional model for selling spacecraft is that you get paid to deliver a satellite, whereas in the future it could be leasing spacecraft,” he said. “Innovation is not just about technology; it’s about how we do business.”

ÅAC Clyde is not alone in offering turnkey solutions to such customers. Open Cosmos, a British startup that builds and operates cubesats for customers, launched its first satellite last year. And Loft Orbital raised $3.2 million last year to build and operate a constellation of satellites for customers who want to put payloads in space but not build or operate the spacecraft. In August, Loft Orbital unveiled the roster of suppliers it intends to use to build, deploy and operate such a constellation.

Clark said new competitors are entering the smallsat manufacturing sector “really aggressively” on price, but that ÅAC Clyde has established itself as a reliable provider with hundreds of systems in orbit.

“Serious customers will come to us,” he said.

Clark reiterated ÅAC Clyde’s intention to acquire or merge with an American company to have a presence in what last year was Clyde Space’s largest market. Some 60 percent of Clyde Space’s products shipped to U.S. customers in 2017, he said.

“We are a fast moving, dynamic company and it’s important that whoever we partner with in the U.S. has the same approach,” he said. Clark didn’t give a timeline for any M&A activity.