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In Today’s Inaugural 1st Newsletter:

• Spaceium Aims to Create Service Stations between Earth and Mars

• What it Takes to Put Canada Back into Top Orbit

• Launching Great Things in Alberta

• Industry Impact

• New Reports from Around the World

• In Other News

Spaceium Aims to Create Service Stations between Earth and Mars

Refuel in space or stop to fix that solar panel? Spaceium aims to make that happen to support other space companies control their costs and payloads.

Think back to the 1950s. At that time, North America had miles of highways but people shortened their trips to match the reach of their gas tanks. These days, space travelers face the same restrictions due to payload limits.

One day, service stations between Earth and Mars will open up a new superhighway, thanks to Spaceium. With letters of intent worth $200 million USD, their customer base is keen to hit the road.

Founders Ashi Dissanayake and Reza Fetanat met at the University of Ottawa while building high-powered rockets to send scientific payloads to different altitudes. As rocket engineers, they saw the engineering constraints in the space industry and the growing need for a centralized location for refueling, maintenance, upgrades and repairs for all the spacecraft.

“With so many missions going to space, we wanted to be the people who solved these problems,” CEO Dissanayake says. “Talking with our customers, we saw a higher demand than we originally thought.”

While other companies offer refueling stations, Spaceium works like a service station. After its demo station, the partners aim to have their first commercial site in operation by 2026. A second one – further down “the road” – would open in 2028.

Demand will only grow

As launches grow, rockets and their payloads get bigger and bigger, Dissanayake notes. By allowing companies to carry more payload, they can take on more customers, earn more revenue and develop better margins.

For instance, Spaceium’s service station will provide cryogenic fuel to refuel The Exploration Company’s NYX spacecraft while it orbits, enhancing its range and payload capacity for lunar missions.

With this type of service, a business could conceivably cut its number of launches. Overall, these stations could cut operation costs by at least 40 percent for in-orbit service providers.

“They just have to get to the first service station, refuel or service their spacecraft and then go on their way,” Dissanayake adds.

Even better, allowing for repairs extends equipment lifespans, leading to less space debris. Spaceium has also signed a tentative deal with a space “garbage collector” to store items on-site before recycling it.

“This is the most sustainable way to connect the ecosystem together,” Fetanat states.

However, they have already celebrated a series of wins. In July, the founders graduated with Mission 11 Seraphim Space Accelerator - one of the world’s largest space accelerators. This 13-week program aids space technology companies move from inception to IPO, picking nine out of 600 applicants.

At this point, Spaceium’s is closing their pre-seed round. After that, they will proceed to their seed round to get the demo station up and running. 

In short, by creating a more conducive ecosystem for all space travelers, companies like Spaceium have the potential to truly change the landscape. Investing in infrastructure like this creates even more opportunities for all players.

What It Takes to Put Canada Back Into Top Orbit

Investing early in Canadian startups pays off with more equity than south of the border. But first, Canadians need to talk more among each other to make it all happen.

Gone are the days of a great pitch with a story and a dream. These days, engineering solutions count when investors hear from companies eager to get their businesses into space.

Fergus Klein, Associate Director of Creative Destruction Lab (CDL), has been ferreting out those firms who fly below the radar. He has discovered a passion and ingenuity that excites him to introduce them to investors who can make their ideas fly.

“What venture capitalists look for has changed and that changes how entrepreneurs build their businesses,” he says. “I see investors investing more on value than storytelling. Hype won’t get us to Mars.”

In some ways, conditions couldn’t be better. The expenses to launch a satellite have dropped to hundreds of dollars due to technological advances – like Starlink’s reusable rockets --  and better collaboration.

Yet, in other ways, the ecosystem has introduced new limitations. After a burst of funding, based on those aforementioned dreams, investors demand more detail about engineering specs and business models. Since then, the size of deals have become more pragmatic.

Meanwhile, other countries are quickly outpacing Canadians held back by a more cautious culture and lack of early-stage government support. Five years ago, Canadian space tech accounted for 4 to 5 percent of the global ecosystem; that number has now dropped closer to 1 percent. But there is still time to regain that relevancy.

Conversely, India, France, Italy, the United Kingdom and others invest government funds to accelerate their efforts. Yet, the Canadian Space Agency (CSA) continues to take direction from parliamentarians, not those working in research institutes’ labs across the nation.

On the upside, investing in Canadian companies delivers opportunities to score healthy equity opportunities. “A dollar goes further in Canada than in the United States in terms of talent and resources that go into ventures,” Klein says. “Companies have to work a little harder here as valuations are under more pressure.”

CDL operates a nonprofit that delivers an objectives-based program for massively scalable, seed-stage, science- and technology-based companies for pre-Seed to pre-Series A technology startups. In short, its mentors push founders to new heights in support of both space and Earth-based technology.

This networking brings together astronauts, entrepreneurs, investors, and scientists from fields related to space exploration and transportation, satellite communications, Earth observation, automation, and robotics. Together, they sharpen objectives, prioritize time and resources and raise capital.

Venture scouts like Klein go looking for talent at exciting tech companies and encourage them to apply. This draws out inventors who may be working as consultants rather than focusing on their own innovation. Once out of the shadows, they can shine in their own right.

“We’re building a robust pipeline of ventures that are falling through the cracks,” Klein says. “Yet getting that first cheque for a runway beyond sweat equity has become harder, especially in Canada.”

The support goes beyond funding. It provides credence that leads to further connections and dollars. Further, it prevents “silly mistakes” that turn out to be so costly.

He describes the Canadian ecosystem as having experience in space tech but less so in early-stage investment. More events, early investments and communication from the CSA would change the equation.

Meanwhile, Brampton-based space-tech giant MDA cannot do it all, according to Klein. It will take many businesses to oversee the hundreds of great-paying jobs ahead. That means keeping talent in Canada for as long as possible and engaging new Canadians who are flocking here.

Klein sees space as a megatrend with standalone industries developing under its umbrella. By focusing on short and long-term opportunities, the sector can accommodate multiple players in various industries.

After all, the math works out better than it did a generation ago. Klein estimates businesses can build and launch a 14-kilogram microsatellite for $200,000. With Starlink, 250,000 customers pay $100 per month, creating a short payback period. Additionally, it provides data access to remote communities to connect entrepreneurs to a broader spectrum.

The applications reach wide as well: assessing forestation, ice caps and weather patterns more accurately. This helps predict global changes, which will particularly help the insurance industry.

“We gain actionable insights from information from space,” Klein says, “then more people will care. Launch reduction costs allow us to do in space what we do on Earth.”

The opportunities include zero-gravity manufacturing, ideal for fine optic cable, 3D printing and crystalline structures.

Some companies – such as Redwire Space and Axiom Space – have already incorporated to build factories in space. The next challenge will be how to manage the return-from-space costs for ideal ROI.

“We need to focus on what Canada will do great in the future,” Klein adds.

The CDL program focuses on early-stage companies (early venture or growth) or even projects (pre-incorporation) working on:

·         Satellite communications

·         Earth observation

·         Positioning, navigation and timing

·         Space Situational Awareness

·         Software and AI systems

·         Robotics and automation

·         Computing and data processing

·         Materials and energy solutions

·         Space logistics and manufacturing

·         Satellite hardware (like sensors, antennas, chips, propulsion)

·         Planetary exploration and interplanetary transportation

In conclusion, drawing more entrepreneurs into this megasector will create even more momentum to make Canada a major player again. However, it will take more collaboration between governments and innovative businesses.

Launching Great Things in Alberta

Wyvern launched Alberta’s first satellite in 2017. Now, the hyperspectral images it sends back to Earth come at 100 times less cost than satellites using traditional telescopes. Meet one of its early investors.

Long before Mark Mitchell launched Weave VC, the Edmonton-based entrepreneur connected with the team that put Alberta’s first satellite into space. He invested early and continues to support the efforts of the people who made that landmark event happen.

Those individuals came together as graduate students who formed an aerospace club at the University of Alberta, then moved into its accelerator program. By 2017, their Ex-Alta 1 satellite  -- a network of 50 CubeSats -- headed out to perform experiments in the largely unexplored lower thermosphere. Eventually, they evolved to create a capital project now known as Wyvern.

This space data company captures the highest resolution hyperspectral images from satellites. Even better, these images come at a cost that’s 100 times less than satellites using traditional telescopes. These days, Wyvern has made further progress by participating in the YCombinator program and working alongside some of the best U.S.-based seed firms.

In the wings, Mitchell invested into the $800,000 pre-seed round then started his own VC fund, of which Wyvern is one of five companies. He also opened doors to connect the founders with other investors. Since then, he has stayed aboard for its first seed round of $6.2 million in January 2022. The fledgling company also generated a further $9.45 million in a “seed plus” round in November 2022. Watch for its Seed A funding coming soon!

Even more exciting, its third satellite goes up in November.

Meanwhile, Mitchell runs WeaveVC, a Western Canada focused early-stage venture capital firm, and serves as a director at Red Thread Ventures, an angel syndicate and advisory firm he co-founded. He has played a principal role in investing more than $8 million across 20 early-stage businesses within both. He has also directly assisted early-stage companies in raising more than $15 million in private capital. 

With two master’s degrees focused on Economics, Finance, and International Management, Mitchell has experience across five countries and three continents, including four years in China.

So, what drew in an investor of his calibre?

“They have a super-sharp team with a great story,” Mitchell says. “They have the right people with backgrounds in different types of engineering. They also convinced people to get involved early, such as CEO Christine Tovee. To have someone of that calibre join a tiny startup is pretty unique. By attracting the right people and building relationships, they are overdelivering on our expectations.”

Overall, the potential of the space economy excites him to look for more opportunities. After all, the reduction in costs to get there has changed the equation.

“Everything was so beta and so abstract when we met Wyvern’s founders,” Mitchell says. “Now, we’re starting to tangibly think about that economy and delivering value to companies on Earth.”

He subscribes to first principles thinking, questioning every assumption and its validity. And he also recognizes that patience will pay off with this type of investment.

“You’d have to be comfortable with the timelines and realization of traction in the way VCs think about revenue growth and commercialization. The way these companies are built, you have to invest a lot up front,” he says.

“On the flip side, when it comes to space tech, we don’t know how big this Mitchellet is. You can talk about mining asteroids and fertilizing the surface of the moon. If you look at the GDP of Planet Earth, what will space’s GDP be? There are so many planets and asteroids. There’s this unknown potential. I’m excited by these emerging markets.”

Why This Matters: With better data at a lower cost, the space economy can provide more value to customers on Earth. However, investors need to believe in great founders and wait a little longer for payoffs, in some cases.

#Impact

First space junk fine hits Dish’s reputation and valuation hard

On Monday, Oct. 2, the Federal Communications Commission (FCC) in the United States set a precedent by issuing its first fine for space debris. It ordered TV provider Dish to pay $150,000 for not moving one of its satellites into a safe orbit. 

The decision sent a strong signal to other satellite operators as Dish’s share price immediately fell by nearly four percent. The market's reaction pushed the company’s $3-billion valuation down close to $100 million.

Japan invest equivalent of $80M in space-debris cleanup

Astroscale got a boost to keep the orbital environment debris-free as it collects in-situ data on a defunct satellite in orbit. Its on-orbit inspection demonstration mission will image and diagnose the satellite in three phases, starting with $18 million USD for Phase 1. Mission development will begin this month and must wrap up by March 2028.

During this mission, Astroscale will gather images to assess the rocket body’s condition, including spin rate, spin axis and condition.

The next mission will address a diverse range of active spacecraft and large debris objects in space. 

Axiom Space partners with Prada on Artemis spacesuits

Even Prada wants a presence in space. Axiom Space has chosen the Italian luxury fashion house to develop spacesuits for the next NASA mission to the moon: Artemis 3 in 2025. 

The collaboration will tap into Prada’s expertise in soft goods and composites to keep the suits light. Prada will work on the protective outer layer of its spacesuit to repel lunar dust without hindering mobility.

“They’re more than just a fashion company. They actually do quite a bit of technologically advanced things,” Michael Suffredini, chief executive of Axiom Space, told SpaceNews..

#New Reports

Deloitte Insights: Riding the exponential growth in space: One of the world's leading financial advisory makes the case for the compelling economics of space. Miniaturized satellites, reusable rocketry and lower launch costs all help accelerate digital and advanced technologies amid new players and new business applications.

Where do future growth opportunities may exist? How do you capitalize on them in a more responsible, sustainable, and efficient manner? Read on!

Seraphim Space Q3 Index 2023: Its findings reflect a return of significant growth rounds due to renewed investor confidence in the sector. Investment into SpaceTech increased 39 percent over the previous quarter with a considerable shift in the distribution of investment between early-stage and late-stage deals. Further, M&A within SpaceTech climbed to all-time highs via corporate and private equity deals. Only U.S. deal numbers stayed flat.

Strategic Framework Andøy (municipality in northern Norway): Catalyst for Norway’s New Space Economy, by Innovation Norway. Its findings arise from an international team of strategic masterplanners, economists and tourism experts who met over 15 months. They emerged with a multi-stakeholder consensus to build confidence and momentum for the leaders and planners who will take the initiative from here. Its priorities include the commercialisation of the space industry, the advancement of small satellite technologies and a complete Norwegian space-related value chain.

# In Other News

Canada gets a rare asteroid sample after OSIRIS-REx drops cargo to Earth: Seven years after leaving Earth, a spacecraft returns with a rare sample of an asteroid, of which a piece will come to Canada. The NASA-led mission aims to deliver insights into how the solar system formed.  (Canadian Press)

Investing in Space: A reality check on SPAC frenzy revenue projections: Two years after a slew of U.S. space companies went public none of them look great -- unless you look at the 2023 revenue projections for Redwire and Rocket Lab. As for the rest of the pack, a few companies have made it almost halfway to their projections or slightly better. (CNBC)

Fast-track military space projects and have the PM head a new council for space priorities, industry leaders say: The Canadian government should accelerate military satellite programs and create a national council headed by the prime minister. Investments in new space innovations are essential for defense and national security, beyond the billions of dollars on new military communications and weather satellites. (Ottawa Citizen)

Canada and Australia Strive to Solve Mutual Problems in Space: A former Canadian astronaut, the head of Space Canada and Australian academics say the two countries should collaborate more. (Globe and Mail)