WASHINGTON — Urban Sky, a startup offering high-resolution imaging from small stratospheric balloons, has raised $9.75 million in a Series A round.

The Denver-based company announced the funding round Oct. 16, led by New Legacy Ventures, Lerer Hippeau and Lavrock Ventures. Several other funds participated in the round, which the company said was oversubscribed.

Urban Sky, which raised $4.1 million in a seed round in August 2021, plans to use the funding to expand its imagery services. The company collects visible and long-wave infrared images using small balloons called “microballoons” by the company that operate in the stratosphere.

The funding will help the company move into markets outside of Colorado, where it operates today. “The primary use of funding is to build what will effectively be a very refreshed, very high-resolution picture of some major metro areas in the United States,” Andrew Antonio, chief executive of Urban Sky, said in an interview.

Urban Sky is still determining where it will expand its imagery services, he said, but will likely be focused on the central and western United States based on demand. The company currently flies one balloon a week but expects to increase that cadence to one every two to three days.

Urban Sky currently offers color imagery at a resolution of 10 centimeters, but Antonio said the company will use the funding to develop cameras capable of better resolution as well as new infrared cameras, all while fitting into the constraints of the microballoon system that limits payload mass to 2.7 kilograms.

The company has seen strong demand from different markets for its color imagery, including environmental monitoring, property insurance and the oil and gas industry, and expects to see interest from others as it expands it services. “We want to build this really strong catalog of very high resolution, very frequently updated imagery over major cities. That can help new applications come to light where people can query that data,” he said.

He argued that Urban Sky’s imagery does not compete directly with those from commercial satellites. “There are no satellites that capture imagery at our resolution, and the markets we serve require the resolution that we offer,” he said, noting the company has few customers who are using Urban Sky’s imagery to replace satellite imagery.

That could change, though, as the company expands. “In areas where we do operate, we can provide a better product at a better price that a lot of satellite operators,” he said. “Over time, maybe we’ll see more business come to us that are already using major satellite imagery providers.”

One of Urban Sky’s customers is Skywatch, which resells imagery from nearly 20 companies that operate satellites and aerial platforms. “SkyWatch is witnessing an unprecedented surge in demand for very high resolution Earth observation data,” said James Slifierz, chief executive of Skywatch, in a statement. “However, satellite-based supply constraints have significantly curtailed our ability to satisfy this growing appetite,” a gap he said Urban Sky can help fill.

Antonio said the company is exploring other uses of its microballoons, citing as an example testing of a mesh network communications system. “We view it in a lot of ways as a payload agnostic system,” he said of those microballoons, although the primary focus remains using them for imagery.

There is also interest in the microballoon platform from the Defense Department, which has awarded the company several Small Business Innovation Research and Small Business Technology Transfer contracts. Some of that interest, he said, came after the Chinese “spy balloon” that floated across the United States early this year.

Urban Sky’s microballoons, he noted, are far smaller than the Chinese balloon. “We’ve very different in technology, but it’s made the business easier to communicate to people who are not familiar with ballooning.”

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...