AST SpaceMobile announced in April that the startup had made its first voice call with a standard smartphone using its BlueWalker 3 test satellite in low Earth orbit. Credit: AST SpaceMobile

TAMPA, Fla. — AST SpaceMobile has fully funded its first five commercial satellites slated to launch with SpaceX early next year after raising $115 million in debt, the low Earth orbit direct-to-device startup said Aug. 14.

The financing is on top of the $64 million the Texas-based venture recently raised by selling equity, including from a $57 million discounted share sale in June to give it more breathing room ahead of plans to launch initial services by next summer.

During the company’s earnings call, AST SpaceMobile chief financial officer Sean Wallace said it has also received multiple indications of interest from strategic investors that could help fund more of the satellites it is building in-house.

“The size, complexity, and commercial and strategic nature of these negotiations requires significant time to complete,” Wallace said, “and may require certain regulatory approvals in order to close.”

The funding talks come nearly two and a half years after AST SpaceMobile merged with a special purpose acquisition company (SPAC), a deal that raised $417 million and propelled the six-year-old venture to the Nasdaq stock exchange.

AST SpaceMobile needs around 90 BlueBird satellites for its planned 5G broadband service, CEO Abel Avellan said on the call, which would enable its terrestrial mobile network partners to keep subscribers connected beyond their cell towers.

However, just five are needed for intermittent connectivity that the company said would suit government and commercial device monitoring applications.

Avellan expects to start commercial services three months after launching its first batch of five commercial satellites on a Falcon 9 at some point in the first quarter of 2024. 

At around 1,500 kilograms each, these Block 1 satellites are 50% smaller than future BlueBird satellites following production delays and cost overruns — similar to the size of the BlueWalker 3 prototype that SpaceX launched in September.

AST SpaceMobile singled out the United States as one of several attractive markets for initial services, although it is waiting for regulatory clearances there along with other direct-to-device startups such as Lynk Global of Virginia, which recently launched initial services in parts of the Cook Islands and Palau in the Pacific.

“We do not see the [Federal Communications Commission] delaying our initial commercial services next year,” Avellan said.

In addition to waiting on a framework from the FCC to regulate the emerging industry, AST SpaceMobile is also seeking permission to lease spectrum from its U.S. telecoms partner AT&T.

The company added that its initial service with five satellites would not bring in enough revenues to fund future spacecraft or turn a profit.

Avellan said the company has secured agreements with more than 40 mobile network operators worldwide to use its constellation, representing about 2.4 billion subscribers. 

AST SpaceMobile reported about $192 million in cash reserves at the end of June, which the venture said is sufficient for supporting costs over the next 12 months.

The company recorded $38 million in adjusted operating expenses for the three months to June 30, and Wallace said he expects them to remain at around this level for at least two more quarters.

Capital expenditures that have been averaging around $10 million to $15 million every three months are set to increase about 50% over this period, he added, as the company ramps up to producing six satellites a month.

In addition, AST SpaceMobile expects to pay between $45 million and $50 million for launch services and related equipment in the three months ended Sep. 30.

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...