ELSE plans to deploy a constellation of 64 cubesats, called Astrocast, to provide services for Internet of Things applications. Credit: ELSE

LOGAN, Utah — A Swiss company with plans to deploy 64 cubesat-class spacecraft by 2021 to support Internet of Things applications has raised an initial $3 million funding round.

ELSE announced Aug. 8 that it closed the $3 million seed round with several investors, led by Airbus Ventures, the early-stage investment arm of Airbus Group, that will support the company through the deployment of two demonstration spacecraft next year.

“We have a strong group of investors, and certainly having Airbus Ventures behind us is really big,” said Kjell Karlsen, chief financial officer of ELSE, in an Aug. 8 interview here. “That could also lead to some potential industrial cooperation.”

“We believe in the development of machine-to-machine communications and we have been convinced by the cost-effective innovative satellite constellation and network technology which ELSE will be providing,” Francois Auque, chairman of the board of Airbus Ventures, said in a statement about the funding round. “We are happy to foster further cooperation between ELSE and Airbus.”

ELSE will use the funding round, as well as existing awards from the European Space Agency and the Swiss government, to complete development of the first two satellites in its Astrocast system. “This seed round allows us to do that,” Karlsen said. “That will take us through the demonstration missions next year.”

Assembly of those first two satellites, three-unit cubesats, has started, he said, as the company moves into a new, larger headquarters in Lausanne, Switzerland. ELSE has arranged with Seattle-based Spaceflight for the launch of one of them, and is finalizing a contract for a separate launch of the second.

“We’re moving forward and hitting all of our targets for our launches next year,” he said.

Those demonstration satellites will be followed by a constellation of 64 satellites, which Karlsen said will begin in the first quarter in 2019. Those satellites will be launched eight at a time into separate planes to provide global coverage. ELSE expects the constellation to be complete by 2021 at a total cost of less than $50 million.

That low development cost, he said, a key selling point for the Astrocast system and its communication services. “A lot of interest is from guys who were not necessarily thinking about satellites because they had this perception that satellite services were too expensive,” he said.

Karlsen said ELSE has agreements with three European companies to serve as pilot customers for the demonstration satellites. Those companies are in the marine, fishing and mobile industries. “As more news comes out about our application, we see a huge interest from a lot of industries that we never thought about,” he said.

He added that he expects the company’s partnership with Thuraya, the mobile satellite operator, will help identify additional customers. While Thuraya did not participate in the funding round, it is supporting ELSE with sales and regulatory issues.

ELSE is already started planning for a larger Series A round needed for the development of the full-scale constellation. Karlsen said most of the investors in the seed round have already committed to participating in the Series A round, which he expects to close in 2018.

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...