Interview with Kleos Space S.A.
Interview with Kleos Space: Data from Space - Revenue on Earth
time to read: 7 minutes | The interview was conducted by Nico Popp on March 29th, 2021 in Luxembourg (LU).
CEO | Kleos Space S.A.
26 Rue des Gaulois, 1618 Luxembourg (LU)
Table of contents:
Kleos Space data collection
news|financial: "You operate a network of satellites that can collect data from Earth. This data is then offered to governments or companies on a subscription model. What types of data exactly are we talking about?"
"[...] The scope of applications for our data is diverse. Anyone wanting to know where people or objects are shows interest. [...]" Andy Bowyer, CEO, Kleos Space S.A.
Initially, we are focusing on maritime applications. We identify radio frequency transmissions, and in this way, we make areas visible that were not previously. How customers use this data depends on their particular business models. For example, shipping companies can use our data to protect themselves against piracy. States can monitor smuggling or other illegal activities better. The scope of applications for our data is diverse. Anyone wanting to know where people or objects are shows interest.
The importance of multiple satellites
news|financial: "You launched four satellites into space in November last year. Further launches are planned for mid and late 2021. Why do you need multiple satellites in orbit? How does that improve your prospects for revenues?"
Our second cluster - the KSF1 Polar Vigilance Mission - is scheduled to launch in the middle of this year. The KSF1 mission will deliver enhanced Earth coverage closer to the equator, thereby increasing our revenues and potential customer base.
We will also sign a contract with rideshare provider Spaceflight Inc. to launch our third satellite cluster, KSF2, in December 2021 onboard a SpaceX Falcon 9 rocket. In this way, we will cover even more Earth regions, improve our data quality, and become an even more attractive option for potential customers. This, in turn, should lead to an increase in sales.
news|financial: "Speaking of revenue, you had announced that you would start generating revenue in 2021. How many paying customers do you currently have?"
"[...] We already have customers who continue to develop our product in a partnership relationship with our team and provide us with valuable input. [...]" Andy Bowyer, CEO, Kleos Space S.A.
The commissioning and data acquisition of Kleos' first Scouting Mission satellites, successfully launched from India in November 2020 at a 37-degree inclination, is nearing completion. We expect to deliver the first data to our test customers very soon. We already have customers who continue to develop our product in a partnership relationship with our team and provide us with valuable input. Kleos Space has a broad customer base, ranging from focused small businesses to global defense contractors.
news|financial: "In the past, the supply of rockets capable of carrying satellites into space was limited. Today, there is an increasing number of commercial projects. What does that mean for your business? Have the costs of satellites come down?"
Significantly. Whereas it used to take several years and cost many millions of euros to put satellites into orbit, small satellites today can be launched for minimal cost and, depending on the mission's complexity, can be relaunched. As a result, data-oriented companies, such as Kleos Space, can cost-effectively access space. Companies focused on nanosatellite-based services benefit from this framework and the easy-to-assemble and build cube satellites. The payloads of launch vehicles are also increasing, which also reduces launch costs.
The durability of a satellite
news|financial: "How long can a satellite stay in orbit before it needs to be replaced? Is there a possibility of any remote maintenance?"
The lifetime of a satellite in orbit depends on its ability to withstand the effects of radiation, dust or vacuum and to maintain its orbital position. Small satellites' economics and their lifetimes range from one to ten years, so it doesn't make sense to repair, refuel, and upgrade satellites in orbit. Instead, it makes sense to replace them frequently to keep up with the latest technology.
The attractiveness of the subscription model
news|financial: "Let's look at Kleos Space from your customers' perspective: Can you give specific examples where companies, or even governments, have cost advantages by relying on your products?"
"[...] We cover essential regions, such as the Strait of Hormuz, the South China Sea, the Australian coast, the southern US coast, and East and West African coasts. [...]" Andy Bowyer, CEO, Kleos Space S.A.
Given the wide range of opportunities customers get from our data, subscription pricing is very reasonable. We cover essential regions, such as the Strait of Hormuz, the South China Sea, the Australian coast, the southern US coast, and East and West African coasts. We are currently developing our offering to meet NATO's requirements, the Five Eyes intelligence alliance, the European Commission and other key institutions. Our offering covers the areas of defense and security, and regulation and environmental protection or even trade. We are convinced that we will be able to address many potential customers with our offerings.
ESG in space
news|financial: "Space seems like a law-free area to us. Nonetheless, activities in space can have an impact on Earth. How do you ensure that the data you collect with your satellites is not used for unlawful purposes?"
We have a robust compliance system and know-your-customer process to verify our customers' identity before doing business with them. Our goal is to use our data to support compliance with laws and regulations. There is also a lot of demand in this specific area.
Advantages of Kleos Space
news|financial: "As mentioned earlier, there are more and more commercial space projects. What makes Kleos Space special? Why should people invest?"
"[...] We work with clusters of satellites, each satellite collects data, and this data is collected and sent to the operations center. There, the information is processed and summarized, creating an accurate picture of the situation. [...]" Andy Bowyer, CEO, Kleos Space S.A.
We work with clusters of satellites, each satellite collects data, and this data is collected and sent to the operations center. There, the information is processed and summarized, creating an accurate picture of the situation. Kleos technology consists of proprietary algorithms that enable the detection and independent geolocation of radio transmissions from space. The technology involves specific knowledge and expertise regarding the required detection equipment and, most importantly, the optimized positioning of clusters. The clusters consist of 4 microsatellites, flying in a specific formation in Low Earth Orbit (LEO) at about 500 km above the Earth. This technology offers new possibilities for observation. The patent portfolio acquired by Kleos includes trade secrets, designs and elements that are potentially registrable worldwide. The market for Earth observation data is growing steadily as increasing efficiencies make it cheaper to collect. In addition to governments, more and more commercial users are being considered as customers.
news|financial: "You have anchor shareholders from Dubai and Australia. Have your shareholders already opened some doors for you? Are there any exchanges going on?"
"[...] The interaction with investors and potential customers is essential to us and strengthens our Company's position in the market. [...]" Andy Bowyer, CEO, Kleos Space S.A.
We are pleased to have the support of existing and new high-profile investors who have understood the vision and potential of Kleos. The strong participation and demand are a clear sign of confirmation for us and proof that Kleos Space can be an attractive opportunity for investors. The interaction with investors and potential customers is essential to us and strengthens our Company's position in the market. Especially in a young industry, it is necessary to be well networked.
news|financial: "Your business is just getting off the ground. Can you give us an outlook? What kinds of customers are you in negotiations with and what milestones do you want to have achieved by year-end?"
"[...] A key milestone for Kleos Space will be the launch of the KSF1 satellite for the Polar Vigilance Mission, scheduled for mid-2021. Then we will deliver even more data and become attractive to even more customers. [...]" Andy Bowyer, CEO, Kleos Space S.A.
We have a significant number of pre-orders and a pipeline of around 160 potential customers. We are currently in discussions with various government agencies and organizations in the US and Europe. We will grow by launching more satellites and collecting more data. We will also grow by entering new markets outside of the maritime space.
What prospective customers like most about our offering is that we are commercially independent. Customers can also work with our data without having to understand every technical detail. A key milestone for Kleos Space will be the launch of the KSF1 satellite for the Polar Vigilance Mission, scheduled for mid-2021. Then we will deliver even more data and become attractive to even more customers.
news|financial: "Thank you very much for talking to us."