Our Investment in Astranis – Building the Next Generation of Internet Satellites

Raises $250 million in equity financing

Four billion people still have no reliable broadband Internet access

By Brent MacDonald – Principal @ Rising Tide VC

Today, global bandwidth demand continues to grow, spurring terrestrial and submarine cable network operators to undertake extensive network upgrades and deployments.[1] Traditional Internet satellites are as big as double-decker buses and cost hundreds of millions of dollars to design, build, and launch. It has become increasingly clear that there is room for — and demand for — innovation in satellite Internet.

Astranis is one of many satellite Internet startups that have emerged over the past few years but differentiates from the competition in its unique approach. Where others are developing constellations of hundreds of next-generation satellites in low Earth orbit or sticking to the old model of massive satellites in geostationary orbit, Astranis achieves the best of both worlds: next-generation technology in a proven, reliable, efficient orbit. Astranis deploys individual small satellites to geostationary orbit to fill known demand in individual markets. This model is uniquely efficient. Astranis’ first customer, Alaska’s Pacific Dataport, has contracted Astranis to put up one satellite that, by itself, will triple the satellite bandwidth available to the State, providing connectivity to approximately 40% of the population that currently lacks reliable access to broadband Internet.

Astranis also announced a deal that would bring broadband to millions of people in Peru. The Company’s agreement, which it says is worth over $90 million, with Latin American service provider Grupo Andesat will see Astranis deploy one of its small form factor satellites specifically for Peru. This first satellite, which will go into service in 2023, will light up about 1,000 cell sites and provide broadband Internet to approximately three million people across the country. And is the first time that the people of Peru have had their very own dedicated satellite. The Astranis deal with Andesat includes an option for a second satellite under the same terms, which could be deployed as early as 2024.

A New Space Economy on the Edge of Liftoff

Morgan Stanley’s Space Team estimates that the roughly $350 billion global space industry could surge to over $1 trillion by 2040. More specifically, five drivers stand out in today’s space economy: technological advances creating expectations of more cost-effective (and therefore lucrative) space activities, increased private investment by investors who are new to space, a global economy that is increasingly data-dependent with diverse effects on space capabilities and markets, an increasingly widely shared vision of space as transformative for humanity, and military/strategic developments around space as a crowded and valuable high ground. The data-dependent global economy has also created a massively growing demand for two space products: communications and data. Four billion people still have no reliable broadband Internet access. Astranis is here to change that.

Why We Are Excited?

Astranis is building small communications satellites for a geostationary orbit that are 20 times smaller than those of its predecessors – just 350 kg – compared to traditional satellites that are upwards of 6,500 kg. Astranis can manufacture and launch satellites in as little as 12 months instead of 3-5 years, with more bandwidth than was previously possible with the same form size. Their world-class team is led by Co-founder & CEO John Gedmark and Co-founder & CTO Ryan McLinko and includes engineers from premier satellite and space programs, including SpaceX, Boeing, Lockheed Martin, Skybox, Planet Labs, and NASA, in addition to top talent from Qualcomm, Apple, and Google. Astranis’ Series C funding round will be used to significantly expand the production of its unique microsatellite platform, built to satisfy the significant global demand for affordable broadband. Additionally, Astranis will dramatically accelerate new technology research and development to support its next-generation platforms. That includes the company’s proprietary software-defined radio technology, which increases satellite performance and flexibility, and allows manufacturing at scale, lowering the price point to end consumers. To date, Astranis has raised over $300 million.

Read the Series C funding press release here.

Rising Tide Fund Managers, LLC and its affiliates (“Rising Tide” or “We”) is a United States venture capital firm investing primarily in the information technology and healthcare/life sciences markets. Over the last 35 years, we have partnered with family funds, high-impact investors, and strategic partners to help launch and expand startups in a variety of industries across three continents. We are dedicated to cooperating with our entrepreneurs at all stages: from financing to leveraging our international networks to facilitating exits by design. For more information, visit www.rtf.vc.

The portfolio companies described herein do not represent all the portfolio companies purchased, sold or recommended for portfolios advised by Rising Tide. The reader should not assume that an investment in the portfolio companies identified were or will be profitable. Past performance is not indicative of future results. Investors should be aware that a loss of investment is possible.

[1] A simple reason for such massive increase in data demand is because of the ever-increasing devices and connections which are growing faster at 10% CAGR than both the world population (1% CAGR) and Internet Users (7 % CAGR). A connected ultra-high definition TV consumes nearly 15-18 Mbps of data.