LeoSat confident Jsat investment will spur other investors
WASHINGTON — LeoSat is confident that a recent investment by heavyweight Asian satellite operator Sky Perfect Jsat in the startup’s planned high-throughput, low-Earth orbit system will encourage other investors to jump onboard.
Tokyo-based Sky Perfect Jsat announced May 11 it will invest an undisclosed amount to help the Luxembourg-based LeoSat finance a constellation of up to 108 Ka-band satellites.
Koki Koyama, Jsat’s senior managing executive officer, said the company, which controls a fleet of 18 satellites, “sees the strategic importance of aggressively participating in the LEO/HTS business.”
Jsat’s investment follows what is now a trend among several of the world’s largest satellite telecom operators to team up with or create their own non-geosynchronous satellite networks. In 2015, Intelsat invested in LEO/HTS operator OneWeb and is now seeking a merger. SES acquired the medium-Earth orbit HTS player O3b Networks in 2016 and Telesat is building a LEO/HTS constellation of its own.
In the mobile satellite services (MSS) space, Thuraya has partnered (but not invested in) Swiss-startup ELSE, which is building a constellation of 50 cubesats for machine-to-machine connectivity, and according to a May 12 Bloomberg report, LEO MSS operator Globalstar is also up for sale.
“With the current and future growth of data traffic and the unique nature of the LeoSat system and its focus on the business market, we believe there will be very strong demand for the LeoSat solution,” Koyama said in his statement. “This investment and development partnership with LeoSat will allow SJC to expand and complement our existing GEO satellite services and beyond by enabling us to respond to customer needs which are not being met by today’s technology.”
Getting the ball rolling
For LeoSat, the fresh capital ends a dry spout for the startup during which investments proved harder to gain than anticipated. In an interview with SpaceNews, LeoSat CEO Mark Rigolle said Jsat fulfills the role of a strategic investor to kick off LeoSat’s $100 million Series A investment round. That money will enable LeoSat to reach out to other prospective investors with greater confidence, he said.
“The name Jsat opens a lot of doors in Asia, not in the least in Japan, where we haven’t had the same depth of investor dialogue compared to certain parts of the world,” Rigolle explained. “So both in visiting people we’ve already talked to and in widening the number of people we will be able to talk to, there are enormous benefits to this announcement.”
Following this, Rigolle said LeoSat plans a Series B round in the neighborhood of $175 million, which would enable the manufacture and launch of two demonstration satellites in 2019. LeoSat had originally sought to launch the demo satellites in 2018, but the time needed to court prospective investors drew out that timeline.
Rigolle, who was the chief financial officer at SES in 2009 when the operator chose to first invest in O3b, said conversations with Jsat took nine to 10 months before culminating in an investment, which was roughly the same amount of time SES took evaluating O3b.
Orbital proving grounds
LeoSat estimates the full cost for its network — including satellites, ground stations and everything else — will land between $3.5 billion and $3.6 billion.
Before trying to convince investors and banks to put up that amount, LeoSat is doing a demonstration mission to showcase two unique technologies for the constellation: optical inter-satellite links and a new onboard processor. Rigolle said versions of both technologies exist, with space heritage, but not in the format that LeoSat envisions using.
“There is some development to be done,” he said.
The two “early bird” satellites would have a lifespan of only three years instead of the 10-year life expectancy of those in the commercial fleet, serving the purposes of de-risking new technology and generating incremental revenue, Rigolle said. By validating LeoSat’s version of laser links and on-board processing in orbit, Rigolle hopes more investors will follow Jsat’s lead.
For the full constellation, LeoSat is basing the satellites on Thales Alenia Space’s Elitebus, and estimates each will have a mass of 1.25 metric tons. From a 1,400-kilometer orbit, Rigolle said LeoSat will have latency as low as 16 to 20 milliseconds for services like cellular backhaul, and around 116 milliseconds for long distance transmissions such as from London to Singapore.
“On the longer distances we start outperforming [fiber] more, because the speed of light is faster in a vacuum than it is through glass,” he added.
Jsat and LeoSat intend to pursue joint marketing of LEO/HTS, but Rigolle said interoperability between LEO and GEO is “not something totally fleshed out right now.”
Jsat’s partnership with KSAT to provide ground network services for LEO operators won’t have any affect on LeoSat, Rigolle said, but KSAT’s Svalbard ground station site will enable the company to begin offering a partial service once it has a plane populated with satellites.
Thanks to the optical inter-satellite links, Rigolle said LeoSat envisions ultimately having just one ground station and one backup. If the need arises to better distribute the traffic load among different satellites, he said LeoSat would consider adding more gateways.