Space is getting more crowded—literally. 2022 saw a record year for rocket launches, at 186. Many of these rockets delivered satellites, whose number expanded by 45% last year to about 7,000 currently in operation—the most ever. These satellites serve many purposes, but the biggest use case is communication. Bridging such gaps in distance would have been unthinkable in a previous era.
Emerald client Nabtesco Technology Ventures (NTV) recently marked these milestones in the space industry with an investment into FOSSA, a provider of satellite-based Internet-of-Things (IoT) solutions. In this interview, Emerald Investment Director Frank Balas gives his take on the rationale behind the deal and the broader market for FOSSA’s offering.
What are “satellite-based IoT solutions”?
To answer that, first we need to understand the shift that has been happening in space.
Traditionally, satellites that weigh several tons and cost more than $100 million each have been launched into high orbit—around 36,000 kilometers (km) above the Earth’s surface. These formidable specs naturally limit their numbers. These satellites are generally used for television broadcasting and telecommunications and transmit huge streams of data.
Now, a new generation of satellites is proliferating. Members of this generation vary in weight from less than a ton to about a kilogram, revolve at about 500 km (also known as low-earth orbit) and are much cheaper to make and launch. They can’t transmit as much information as the older generation but are good for specialized applications requiring smaller bits of data.
Now we get to the satellite-based IoT solutions. In concert with this shift going on in space, more and more operators of physical assets are lacing their property with sensors that can transmit all manner of information—the so-called IoT. If these assets are in places that lack solid mobile broadband infrastructure—out in the ocean, say, or anywhere in the four-fifths of the world not covered by broadband—these small, low orbit satellites can provide a way to help transmit their signals. Hence “satellite-based IoT solutions”.
What sectors could benefit most from satellite-based IoT solutions?
There are many sectors we’re bullish about:
- In agriculture, monitoring of soil moisture, livestock health and equipment performance is a growing application. Many large farms exceed the range of cell towers, making satellites an appealing alternative.
- Similarly, forestry managers can use satellites to gain visibility over vast tracts of land, including plant health and fire risk.
- Methane emanating from oil and gas extraction and transport equipment is a major contributor to climate change, and more and more jurisdictions are mandating methane monitoring—an ideal case for satellite IoT.
- Energy installations in general—including wind and solar farms in remote places—fall into a broad category of infrastructure that could be monitored by satellite. Other examples include dams, bridges and weather stations.
- Fleet management is another sector that could be of interest, particularly in coastal shipping. Large container ships are generally already connected through high bandwidth satellite connections, but there is a large fleet of fishing boats, coastal supply ships and work boats that have very limited connectivity.
Why is this deal good for NTV specifically?
Nabtesco Corporation, the parent company of NTV, makes aircraft flight control components and systems. As it pivots from the pure-play hardware space into a more integrated model, it is keenly watching space become an exciting new frontier. Earlier this year, we facilitated NTV’s investment into Space One, which makes rockets. FOSSA now complements this with a more service-oriented offering, helping NTV build out a stack of space-based hard- and software providers.
(Emerald manages the investment activities of NTV under its corporate venture capital-as-a-service mandate, aiming to provide the best value for collaboration with innovation vanguards like FOSSA.)