Capella Space raises $19 million for radar constellation
WASHINGTON — Capella Space, a startup planning a constellation of radar imaging satellites, has raised an additional $19 million to fund continued development of its system.
The San Francisco-based company said Sept. 26 that it raised the Series B round, led by Spark Capital and Data Collective, also known as DCVC. Capella Space has raised approximately $35 million to date, including prior investments by both venture capital funds.
That funding will support development of what Capella Space ultimately plans to be a 36-satellite constellation providing synthetic aperture radar (SAR) imagery with hourly revisit times. The company’s first small satellite is scheduled for launch in November as part of a SpaceX Falcon 9 dedicated rideshare mission.
“What this new funding allows us to do is execute on the next few satellites — launch them and start delivering imagery — while we’re kickstarting the manufacturing of the first batch of the constellation,” said Payam Banazadeh, chief executive of Capella Space, in an interview. The funding will also support expansion of the company’s business development team and product services.
The first satellite will strictly be a technology demonstration mission, he said, but two more scheduled for launch next year will start providing SAR imagery. Capella Space already has “early engagements” in place with initial customers for imagery from those later satellites, he said.
SAR offers the benefit of being able to collect imagery regardless of time of day or amount of cloud cover, unlike optical imagery. However, it’s also had a reputation for being more difficult to work with, an issue Banazadeh said is fading with the rise of automated systems to interpret the imagery and extract the desired information.
“SAR is more difficult to look at, compared to optical,” he acknowledged. “But the end product is not the images. It’s some set of graphs, some set of structured data, and some level of information. So, for the end customer, I don’t think it really matters that much if you’re using SAR or optical.”
“Major industries and governments are starved for timely satellite data, and even more so for data with the unique signal and intelligence advantage Capella’s synthetic aperture radar tech can provide,” said Matt Ocko of DCVC in a statement about the investment. “Commodity trading, urban development, critical infrastructure, shipping and security: businesses across the board realize that milliseconds matter in today’s global economy, and a steady stream of reliable, easily accessible Earth information just does not exist.”
One major customer Capella Space anticipates for its SAR data is the U.S. military, as the company will be the only domestic provider of such imagery. In addition to the venture funding, the company previously won an $11 million contract from the Pentagon’s Defense Innovation Unit. Banazadeh said the company has received half of that money so far and expects the other half to come by the end of this year.
Commercially, he said major customers will likely come from the infrastructure monitoring, maritime and agricultural markets. In those cases, SAR can provide unique measurements and do so with the frequency and reliability needed by customers.
A challenge for developing any satellite constellation has been launch, he said. “Whether we like it or not, launch problems will not go away any time soon,” he said. Capella Space designed its constellation to be gradually scalable, with the full system featuring 12 planes with three satellites each.
The satellites are small enough that three of them — one plane — can be launched on a single Rocket Lab Electron vehicle, a more optimal approach that relying on rideshare launch opportunities. “We’re going, with just one rocket at a time, to add these planes and add capability,” he said.
Banazadeh said Capella Space will need to raise another round to build out that full constellation, most likely in the next 12 to 18 months. Raising money has not been a problem for the company so far, he said.
“I’ve been a strong believer that the money itself is relatively easy to raise in Silicon Valley these days,” he said. “What really matters for a space company is to have investors who have deep experience in the hardware business, as well as the space business in particular.”
Capella Space has that, he said, with DCVC and Spark Capital. DCVC has invested in companies like Planet and Rocket Lab, while Spark Capital has extensive experience in hardware companies. One of the members of Capella’s board is Chris Boshuizen, an entrepreneur-in-residence at DCVC and a co-founder of Planet.
Both funds are “Tier One” investors, Banazadeh said, offering support beyond their financial investments. “They’ve got a really good network, and that helps with recruiting, especially at the executive level,” he said. “They have connections with some of the potential consumers of this type of information.”
“Being with an investor like Data Collective, which has a really rich portfolio of space companies, is like being part of the same family,” he added.