This article originally appeared in the Dec. 4, 2017 issue of SpaceNews magazine.

Sending data to and from different spots on Earth is big business for satellite operators, but Cloud Constellation sees a lucrative opportunity to offer satellites as the ultimate cloud storage solution for sensitive data.

The Los Angeles-based startup, now approaching the third anniversary of its founding, has a way to go to fulfill that dream.

In September, Cloud Constellation signed a launch agreement with Virgin Orbit for 12 LauncherOne missions, and has a memorandum of understanding with Space Systems Loral to build a dozen satellites for the purpose of ultra-secure data storage in space.

But Cloud Constellation, which raised $5 million about 18 months ago in a Series A funding round, says it needs $480 million to really get going. Complicating matters, co-founder and CEO Scott Sobhani, who had been diagnosed with brain cancer, died in July.

“Scott was 53 years old,” said Cliff Beek, who moved up from president to CEO after Sobhani’s death. “The impact on Cloud was emotional, he was a wonderful human being. Anyone blessed enough to have been in his orbit truly misses him.”

Beek, who joined Cloud Constellation as president shortly after the company incorporated in 2015, took over Sobhani’s day-to-day responsibilities in August 2016.

Cloud Constellation’s launch goal for its first satellite has slipped by a year to late 2019, and could end up in 2020, Beek said. He attributed the delays not to Sobhani’s passing, but to a redesign of the constellation, called SpaceBelt, from 16 satellites in low Earth orbit down to 12.

Cloud Constellation wants SpaceBelt to circle the Earth some 460 kilometers above the equator. Beek said nine SpaceBelt satellites will be for communications, while three will be for memory.

A capital raise Beek expects to close by the end of March could kick Cloud Constellation — now 21 people — into higher gear. Beek said the current raise combines two previously planned funding rounds into a single larger one, and would give the startup momentum to build out its constellation, called SpaceBelt.

“We are trying to close a $200 million round, and then move to a debt raise,” he said.

The SpaceBelt satellites Cloud Constellation wants SSL to build would weigh about 450 kilograms each, nearly maxing out LauncherOne’s projected lift performance, requiring them to launch one at a time. Each satellite will have a 10-year design life and 800 to 1,200 watts of power, Beek said.

Cloud Constellation’s SpaceBelt system would rely on geostationary satellites to connect to users and the ground. SpaceBelt satellites wouldn’t communicate directly with the ground. (Credit: Cloud Constellation)
Cloud Constellation’s SpaceBelt system would rely on geostationary satellites to connect to users and the ground. SpaceBelt satellites wouldn’t communicate directly with the ground. (Credit: Cloud Constellation)

Satellites that rely on satellite

Cloud Constellation is targeting customers who put a high value on cybersecurity and want to silo their data as far away from hackers as possible. SpaceBelt satellites won’t face the Earth, he said, but have reflectors flipped up to connect with satellites above them in geostationary orbit.

“We look at geostationary satellites as being our cell towers,” Beek explained. “We lease transponder services from them, and our LEOs are always connected.”

Optical links between the satellites connect them into the SpaceBelt. Because the SpaceBelt satellites never communicate directly with the ground, Beek said “there is no chance for that data to be breached.”

“Hackers are looking for a Wi-Fi connection to your server that hasn’t been upgraded,” he explained. “They are looking for ways in usually through fiber optic, and fiber optic carriers usually have to interconnect at exchange points. There are times there where you can perhaps breach through security walls and come in, but the most exposed areas are usually on the premises themselves — a Wi-Fi connection, a router that’s left open. You don’t have that in a VSAT terminal going to a GEO. It’s very difficult to hack into that.”

Andy Silberstein, chief commercial officer of CyberESI, a firm with substantial experience working with satellite communications, agreed that having a data storage system in space provides meaningful security by virtually eliminating physical access, but cautioned that nothing with even the smallest connection to the internet is fully immune to cyber attacks.

“It’s all about IP protocols,” he said. “Once you are connected to the internet, you are vulnerable whether you are traversing terrestrial networks or going through satellite. If at the end points you are connecting to the internet, you are vulnerable, and that doesn’t change whether you are in a satellite transmission architecture or terrestrial and/or land-based wireless system.”

Furthermore, if any system has information hackers want, being in space won’t stop them from pursuing it, Silberstein said. State actors and organized criminals have substantial resources to levy against data centers, he warned, and shouldn’t be taken lightly.

Beek said Cloud Constellation is aware of the attention claiming something is “hack proof” draws, and is pooling cyber experts to test SpaceBelt’s fortitude.

“We are looking for ways by hiring people who are cybersecurity or White House [experts] to come in and say ‘how would you breach this?’” he said.

In addition to relying on satellite capacity from GEO operators, Cloud Constellation will also be acustomer of GEO operators for teleport services, Beek said.

How cyber-protected those teleports are will also have a direct bearing on SpaceBelt’s intruder defense.

An artist’s rendering of intersatellite links between the different proposed SpaceBelt satellites.
An artist’s rendering of intersatellite links between the different proposed SpaceBelt satellites.

Getting to market

Beek said Cloud Constellation patented the technology needed to turn reflectors up to face the GEO arc, but will be buying the reflectors from third parties. By connecting to other satellites, Cloud Constellation dodges individual licensing requirements that would otherwise be required to do business in different countries, Beek added.

Cloud Constellation expects banks and other financial institutions will present the largest addressable market.
Beek said media entertainment companies are also a meaningful projected customer base as they desire to protect movies and television shows from pirated release before their intended debut.

Three companies, including Mexican satellite telecommunications company Elara Communicaciones, are Cloud Constellation’s first customers, he said.

Each SpaceBelt satellite, Beek said, will have roughly eight petabytes of available storage — room enough to back up roughly a quarter million 32-gigabyte iPhones.

Beek said Cloud Constellation will pace launches with customer demand, and can work with Virgin Orbit — which aims to debut LauncherOne by mid-2018 — to fit missions as needed.[contextly_auto_sidebar][contextly_auto_sidebar]

Caleb Henry is a former SpaceNews staff writer covering satellites, telecom and launch. He previously worked for Via Satellite and NewSpace Global.He earned a bachelor’s degree in political science along with a minor in astronomy from...