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

Small Satellite Startup Raises $40 Million in Equity Financing and A Debt Facility Up to $50 Million

By Brent MacDonald – Principal @ Rising Tide VC

Four billion people still have no reliable broadband Internet access. Astranis is here to change that. 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.

Five trends 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 massively growing demand for two space products: communications and data. Morgan Stanley estimates that satellite Internet providers could be generating over $500 billion in revenue by 2040.

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 the 39% of the population that currently lacks reliable access to broadband internet.

“Digging trenches to run fiber optic cable is spectacularly expensive and won’t be affordable in many places around the world for generations. For some remote locations, it may never be feasible. Our next-generation small satellites are perfectly fit to the task of helping individuals get connected to the internet for the first time.” John Gedmark, Co-founder & CEO Astranis

Why We Are Excited:

Astranis is building small communications satellites for 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 B funding round was led by Venrock, with significant participation from existing investor Andreessen Horowitz. Joining the round were existing investors including Fifty Years, Refactor Capital, and Y Combinator. Rising Tide provided early-stage financing to the Company. To date, Astranis has raised over $103 million.

Read the full 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.