Spacetec – Invest in the Enablers of the Digital Economy

SpaceTec –invest in the Enablers of the Digital Economy

Rainer Horn

Rocketry

Atlas V Launch 18 December 2016 2

Space goes digital and digital players go space

3 OneWeb‘s Vision: 900 Satellites

OneWeb‘s Backers: over 2 BN already invested

5 Low – Medium and Geostationary Earth Orbits

MEO >2000 km SatNav GPS, Galileo & Co

LEO

GEO 35,786 km 160 – 2000 km above Equator Earth Observation, Iridium SatCom/TV New Mega Constellations Google/SpaceX, Boeing, OneWeb … International Space Station

Commercialisation of Space is rapidly advancing

Traditional Space NewSpace

Institutional Commercial New Business Models Space Space with Commercialisation Potential

Navigation LEO/MEO/GEO GeoInformation, Services: IoT, constellations Launcher Data and Media and Services Internet for All Debris Mitigation Components & Removal Military MSS/ FSS SmallSat and Subsystems Space Activities COM Satellites Systems For SmallSats Satellite Servicing LEO COM Space Science Positioning, Manufacturing in Satellites SmallSat EO Energy from Navigation Microgravity Constellations Space & Timing and Space Traditional EO Satellites New Launch Space Resource Systems Mining Human Space Space Humans Exploration ISS Servicing Space Tourism Habitats to Mars

Established Implemented Started Emerging

7 Space is moving from the world of government procurement and aerospace engineering giants to the world of venture‐capital‐funded startups and business plans that rely on ever cheaper services provided to ever more customers

August 2016 Issue

What is new in NewSpace ? Why do private investors engage?

New wave of space entrepreneurs and technology . Tech entrepreneurs bring IT‐industry and market‐driven thinking . Terabytes of Earth Observation satellite data becoming available for free . Near real‐time data acquisition leading to many new applications and business models . Miniaturised satellite design & technology at a fraction of the cost . New satellite design philosophies, platforms, scalability, serial production . Software instead of hardware . Cheaper launches

The Internet of Things (IoT) & Big Data revolution . Industrial IoT require global & high reliability of connectivity and positioning . Big data solutions enable new applications using vast volumes of sat data . Advanced sensors to monitor, control, enhance and automate our world Many US VCs have invested in multiple NewSpace businesses

Bessemer Accion Systems

Planet DFJ

Rocket Lab First Round Capital Exited 11x Skybox

Founders Fund SpaceX

Khosla Spire

Exited RRE Ventures The Climate Corp

Source: „Start‐Up Space“, The Tauri Group January 2016

Some VCs have already seen nice exits

Series A : $3M Series B : $18M Series C : $70M EXIT: $ 500 M 31 July 2009 26 July 2010 17 April 2012 July 2014

 Draper Associates  Draper Associates Investment  Khosla Ventures  Khosla Ventures  Khosla Ventures syndicates per  Bessemer Ventures  Bessemer Ventures investment round  Asset Management “Skybox’s satellites TOTAL $91M Ventures will help to keep  CrunchFund  Canaan Partners Google Maps accurate  Norwest Venture Partners with up‐to‐date imagery”

Employees Stanford Spin‐off 50 200

Return on Investment (IRR) 62% 60% 67%

Achieved Multiple 11x 6x 3x 2017 M&A

Source: Crunchbase, Skybox, Press, SpaceTec Analysis

11 What are the disruptive technology trends? –Space as enabler of digitisation

Industries impacted

Po sit io n in g Mobility

Pre c ision Tim ing Tra n sp o rt Navigation Authentication GeoSatCom Ea rth O b se rva tio n GeoIntelligence Ag ric ulture Re m o te Se n sing Satellite Refueling Ra d a r Se n so rs Manufacturing Lo c a t io n Ro b o tic s CubeSats Re d und a nt De sig n Bro a d c a st Spaceports Sp a c e Technology In-Orbit Maintenance Po we r Syst e m s Disrupts Industries Infrastructure Fa ilsa fe Syste m s Interplanetary Exploration Suborbital Platforms Pre d ic tive An a lysis Magnetic Detection Insura nce High Altitude Balloons Optical Systems Sa te llite C om m unic a tions Autonomous Motion La se r Lin ks Mobile SatCom Se c u rit y Enc ryp tio n Ene rg y & Ubiquitous Connec tivity Re so u rc e s

Advanced positioning through multiple SatNav constellations Positioning . Multiple Navigation Systems allows for unprecedented accuracy and availability . Soon 5 complete constellations: GPS, GLONASS, Galileo (EU), Beidou (CN), Navic (IN) . Unique features of Europes civil global system Galileo . New seamless indoor / outdoor technologies to monitor critical assets GeoIntelligence

Autonomous Motion

Ubiquitous Connectivity Galileo ApplicationsNavigation Graph Applications

GeoIntelligence analysing images with big data methods Positioning

. Number of Earth Observation satellites tripling vs last decade . Terabytes of new data sets daily provide enable new data analysis business . Near real‐time and high resolution satellite imagery heralding a new wave of services GeoIntelligence . New modes of data transmission and distribution in the sky, air and on the ground . Leaps in processing, big data and grid computing allowing petabytes to be analysed

Planet Labs to capture image Autonomous of the planet every day with Motion 150 nano‐satellites

Terra Bella to have 24 microsats imaging the world in high resolution 3x a day

Ubiquitous Unprecedented amount of Connectivity EO data free of charge Agriculture near Tubarjal, Saudi Arabia False Colour Image from Satellite Sentinal‐2A, July 2015

Sentinel‐3A takes Earth’s temperature

17 Original data Patented downscaling method

Example: VanderSat (NL): Soil Moisture Information

GeoIntelligence Turning satellite‐‐derived climate data into valuable information with patented downscaling method. . Deliver global soil moisture information near real‐time on a 100x100m resolution

. Higher granularity irrigation (soil moisture) data, on current and historic data, possibly 2x per day

. Serving insurance, agriculture, land users of all kinds, authorities, weather forecasting etc. Autonomous Motion … powered & enabled by space Positioning

. Commercial user market of UAVs to grow to $ 1.7 B in 2015 . Need for better faster deployment in autonomous and assisted driving . Robotic solutions form key elements of the so‐called “Industrial Internet” . Autonomous vehicles expected by 2020 GeoIntelligence . Artificial intelligence (AI) playing a key role

Acquired by car manufacturer Autonomous consortium to keep strategic enabling Motion capabilities

Experimenting with UAVs, autonomous robots and vehicles Ubiquitous Connectivity

Source: CB Insights –The future of frontier tech

Innovations from space robotics feed into terrestrial solutions Ubiquitous Communications – using the internet layer in the sky Positioning

. New low‐cost constellations for improved connectivity (internet access) in rural areas or underserved markets . Low‐cost, energy efficient, small satellite terminals for M2M and IoT applications GeoIntelligence . Satellite / terrestrial hybrid networks . Improvements in compression techniques and algorithms

Autonomous Motion aims to launch 648 telecommunication satellites by 2020

announced a constellation of 4000 satellites with initial Ubiquitous services to start in 2020 Connectivity

Example Ovinto (Belgium): Monitoring railway assets “Internet of Things”

Positioning & Ubiquitous Supply chain security in unpowered Communication transport units, heavy equipment. Users: petrochemicals, mining industries, food transportation etc. . Reduce cost of ownership and OPEX . Patented solution with 8 year battery . Worldwide coverage through >50 Globalstar Communication Satellites . Designed to operate in extreme conditions . Approved to highest ATEX explosion safety level (zone 1) . Encryption of critical business data

Customers: Satellite connectivity will be key for autonomous drive

Source: TransportEvolved.com, Forbes

Europe has a thriving space application eco‐system with many „Valleys“

Large pool of innovation R&D

. R&D base rich and largely untapped for private investments . Reasonable valuations . European governments spend ~€ 9 Bln p.a. on space technologies . Thriving eco‐system with accelerators and incubators . Technology transfer of space‐related IP to other areas 20 ESA Business Incubator Centres 23 Regions in space application competitions Locations of AppCamps Space Financing Chain, Europe and the world

100k USD 500k USD 1‐5 MUSD

Idea Incubation Early Stage Venture Capital Later Stages

Idea and Incubators & Regional funds (DE) Generic Private Venture Capital business plan Accelerators competitions National) National funds (DE) H2020,

Specialised ESA,

Venture Capital Luxembourg Space Fund (e.g.

Networking platforms programmes

2017

Angels & Crowdfunding Corporate VCs Partners Research

EU SME Instrument Commercial Banks SpaceTec

Contact

Download available: www.spacetecpartners.eu

27 28

Space Tech investments as a new global asset class

. The commercialisation of the space business is rapidly advancing

. New business models at the interface of the space industry and the digital economy

. Application markets: mobility, agriculture, insurance, security, energy, etc.

. NewSpace in the age of Industry 4.0, infrastructure challenges and digitalisation

. Disruptive technology trends

. The entrepreneurial landscape 2015 in Space has been a record year for VC investments in SpaceTech

Mio USD 2'000 60 Seed/Prize/Grant 55 1'800 Venture Number of VCs, Incubators and Accelerators in transactions 50 1'600

1'400 37 40 1'200

1'000 30 1'814 800 19 20 600 20 400 8 6 10 200

180 52 186 160 208 90 21 91 0 80 0 2010 2011 2012 2013 2014 2015

Source: “Start‐Up Space“, The Tauri Group January 2016

Technology with scaling potential is sought by Silicon Valley and Asians alike

“NavShoe“ Team of

. R&D Team with IP from DLR . Spin‐off University of Oulu . Spin‐off Univ. Edinburgh Navigation Institute Munich . Uses the earth’s geomagnetic . Online‐to‐offline play . Indoor navigation for field to find locations inside a . Location information Wi‐Fi pedestrians based on multi‐ building or Bluetooth based sensor fusion . Achieves accuracy within two . Significant strategic . 8 People team moved to meters investment Mountain View / CA . > USD 10 M (Round A) . Undisclosed amount . Transaction: ~EUR 8 M

Source: SpaceTec Partners Research

31 American companies are traditionally acquiring proven European companies

. Spanish company with two . Berlin‐based SME with five Deimos satellites (310kg) RapidEye satellites (150kg) . Global imagery archive . Global imagery archive . Acquisition of assets and unit . ~ 100 employees with ~ 50 employees for ~$ 80M . Acquisition price ~ $100M

… and 22 acquisitions of European geospatial companies since 2003 by …

Opportunities through NewSpace US investors engage regularly in Newspace …

US Venture Capital U.S. BBC – “Billionaire Boys Club” . Founders Fund . Elon Musk . Draper Associates / DFJ . Jeff Bezos . Bessemer Ventures . Larry Page & Sergey Brin . Asset Management Ventures . Sir Richard Branson . CrunchFund . Mark Zuckerberg . Canaan Partners . Ansari Family . Norwest Venture Partners . Bill Gates . Khosla Ventures . Paul Allen . In‐Q‐Tel . Yuri Milner . Mithril Capital Management . … . …

US investors engage regularly in Newspace …

35 The Silicon Valley has a unique personnel pool and a high attractiveness for talents from all over the world

Share of foreign people born in…

50% Silicon Valley California US

45%

40%

35%

30%

25%

20%

15%

10%

0% Population Graduates Working age Employed population People employed in population the IT industry

Successful NewSpace companies win and retain the best employees by instilling the feeling of being something special…

Importance Stress factor Satisfaction Annual salary in of the job high with the Job first 5 years

Tesla Facebook Facebook Space‐X 92% No. 1 88% 96% 116k$

Space‐X 70% No. 2

Space‐X 73% No. 3

Space‐X 78k$ No. 15

24% 44% 64% 71k$ Adobe Facebook HP Oracle

… In addition the provide pay and benefit packages which incentivize firm loyalty http://www.geekwire.com/2016/payscale‐ratings‐rank‐spacex‐tesla‐low‐salary‐high‐meaningfulness/

Study Page 28 37 The Luxembourg government has shown high ambition and vision in its space activities

SpaceTec regularly supports startups (examples)

Strategy Investment Readiness Market Access Funding

Laser terminals air & space GeoIntelligence & machine learning High‐resolution moisture data Hyperlocal maps

The third aircraft Enabling geolocated IoT IoT authentication Data fusion for automated driving

Marine real‐time analytics Safe marine navigation Operating system for IoT Connected space telescopes

Low‐power cm‐positioning for IoT Single‐chip based navigation Locating solutions Mobile app for Outdoor

39 2015 in Space has been a record year for VC investments in SpaceTech

Mio USD 2'000 60 Seed/Prize/Grant 55 1'800 Venture Number of VCs, Incubators and Accelerators in transactions 50 1'600

1'400 37 40 1'200

1'000 30 1'814 800 19 20 600 20 400 8 6 10 200

180 52 186 160 208 90 21 91 0 80 0 2010 2011 2012 2013 2014 2015

Source: “Start‐Up Space“, The Tauri Group January 2016