Landscape for Financing Services in Europe
Brussels, 25 January 2016
SpaceTec Capital Partners GmbH SpaceTec Partners SPRL Sendlinger Strasse 22 Avenue Louise 66 80331 Munich 1050 Brussels Germany Belgium T +49 89 45 16 09 80 T +32 2 318 09 29 F +49 89 45 16 09 79 F +32 2 502 60 49 www.spacetecpartners.eu www.spacetecpartners.eu SpaceTec Activity Scope and Service lines
Management Programme Strategic Coaching & Capital Consulting Management Communication
Landscape for Financing Services in Europe 1 Space technologies are the backbone of the digital age
Large pool of European innovation Positioning R&D . Rich European R&D base … . ~ € 9 Bln p.a. spent on space tech . Thriving entrepreneurial eco-system GeoIntelligence . IP and tech transfer mechanisms …
New space entrepreneurism Autonomous . New satellite design philosophies Motion . Platforms, scalability, serial production … . Decreasing launch costs . Near real-time data provision Ubiquitous . Demand-driven application thinking Connectivity
Landscape for Financing Services in Europe 2 “Positioning technology can save (digital) lives”
Landscape for Financing Services in Europe 3 Source: Handelsblatt 25 Jan 2016 NewSpace is not only a US-based activity, for example, small launchers and services are being developed everywhere
Ground launch Air launch Balloon launch (rockoon)
Landscape for Financing Services in Europe 4 Advanced positioning solutions through new constellations Positioning
. Multi-GNSS, allows for unprecedented accuracy, availability and new features
. New applications thanks to as higher precision and authenticated positioning (Galileo)
. SatNav capacity will increase with additional 40 new sats GeoIntelligence . 4 SatNav constellations to be completed in the coming decade
Global GNSS market size (€ BN) Cumulative core revenue 2013-2023 by segment Autonomous 140 Motion 112 120 + 7% 102 93 100 86
75 80
58 60
40
Ubiquitous 20 Connectivity 0 2013 2015 2017 2019 2021 2023
Source: GSA Market Report, Version 2015
Landscape for Financing Services in Europe 5 GeoIntelligence becomes stronghold in commercial space Positioning
. Number of Earth Observation satellites tripling vs last decade
. Free open data sets providing an enormous amount of data available for analysis
. 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
EO Market Size ($ M) of Data and Value Added Services - Forecast Planet Labs to capture Autonomous image of the planet every Motion day with 150 nano-satellites
Skybox Imaging to have 24 microsats imaging the world in high resolution 3x a day
Ubiquitous Unprecedented amount of Connectivity EO data free of charge
Source: NSR
Landscape for Financing Services in Europe 6 Autonomous Motion … powered & enabled by space Positioning
. Commercial user market of UAVs to grow to $ 1.7 B in 2015 . Need for better aerial imagery & faster deployment in autonomous and assisted driving . Robotic solutions form key elements of the so-called “Industrial Internet” . Autonomous vehicles expected by 2020; almost all automotive OEMs and Tier1 suppliers GeoIntelligence currently conducting R&D towards assisted driving . Essential to understand the regulatory environment
Acquired by car manufacturer Autonomous Motion consortium to keep strategic enabling capabilities
Experimenting with UAVs, autonomous robots and vehicles Ubiquitous Connectivity
Source: CB Insights – The future of frontier tech
Landscape for Financing Services in Europe 7 Ubiquitous Communications for industrial and private use 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
‘Traditional space’ ‘NewSpace’
Autonomous Motion Partnership with Cisco aims to launch 648 telecommunication Developer Programme satellites by 2020 Open interfaces (SDK, API)
More hybrid hardware announced a constellation with GNSS of 4000 satellites with Ubiquitous … initial services to start in Connectivity 2020
Landscape for Financing Services in Europe 8 American, Russian and Chinese investors discover Space-Tech
Successful US Entrepreneurs US Venture Capital . Elon Musk . Founders Fund - Peter Thiel . Draper Associates / DFJ . Jeff Bezos . Bessemer Ventures . Larry Page & Sergey Brin . Asset Management Ventures . Sir Richard Branson . CrunchFund . Canaan Partners . Mark Zuckerberg . Norwest Venture Partners . Ansari Family . Khosla Ventures . Peter Diamandis . In-Q-Tel (US), CIA-Fund . Mithril Capital Management /Peter Thiel . … . …
Investors with Sector Focus Incubators / Accelerators / Crowd
. Airbus Group Venture Fund (US) . Space Angels Network (US) . ESA BICs (Europe) . Space Tango Incubator (US) . GLONASS Fund (RU) . Starburst Accelerator (FR) . Space Techn. Inv. Fund by RVC & Finematika (RU) . A3 - Airbus Group Innovation Center (US) . BDStar Capital (CN) . Space Techn. Incubator Skolkovo Innovation Center (RU) . Runway Venture Capital (US/Russia)* . FunderNation (DE) – Crowdfunding also for Space . Seraphim Space Fund (UK)
* Being established
Landscape for Financing Services in Europe 9 American companies acquire European companies to grow and substantiate their business model
. Spanish company two . Berlin-based SME with . UK-based position Deimos satellites (310kg) five RapidEye satellites technologies company . Global imagery archive (150kg) with 2,100 employees . Acquisition of assets and . Global imagery archive . Includes SiRF (US), unit with ~ 50 employees for . ~ 100 employees NordNav (SE) ~$ 80 M . Acquisition price not . Acquired by Qualcomm disclosed for $2.5 billion
… and 22 acquisitions of European geospatial companies since 2003 by …
Landscape for Financing Services in Europe 10 Europe is building a thriving space application eco-system
20 ESA Business Incubator Centres 23 Partner regions in space application competitions Locations of AppCamps
© Anwendungszentrum Oberpfaffenhofen GmbH
Landscape for Financing Services in Europe 11 The European Space financing eco-system is incomplete
Idea / Later Incubation Seed-Round A-Round Invention Stage Idea and Incubators & National & PPP-Funds Venture Capital Funds Business Accelerators
Plan Competitions
Regional State Funds
No dedicated
space investor for Europe Networking Platforms
BMW i-Ventures
Research Programmes (e.g. H2020, National) (e.g. H2020, Programmes Research Business Angels & Crowdfunding Schemes Corporate VC Funds SME Instrument / Business Loans & Project Finance Coaching
Landscape for Financing Services in Europe 12 H2020 SME Instrument: SpaceTec Coaching examples
Spectrum ARC GmbH (ESA BIC Bavaria) Astrofactum GmbH (Munich/ Berlin)
Engineering and consulting services and testing: A private sector initiative to develop and build a Commercial-off-the-shelf (COTS) electronics are tested commercial space telescope service, and qualified according to NASA and ESA standards which can be used by anyone.
SpaceTec coach support the SpaceTec coach helps in substantiating the H2020 SME instrument feasibility study. commercial use case for the space telescope during the H2020 SME instrument feasibility study.
www.spectrum-aerospace.com www.publictelescope.org
Landscape for Financing Services in Europe 13 Crowdfunding study commissioned & published by the European Commission DG Connect
. Crowdfunding models
. Market development & trends
. Positioning in financing market
. Potential for innovation
. Success factors for campaigns
. Quarterly benchmark
. Regulatory state of play in Europe & internationally
. Perspectives for an evolving regulatory landscape
https://ec.europa.eu/digital-agenda/en/news/crowdfunding-innovative-ventures-europe-financial-ecosystem-and-regulatory-landscape-smart
Landscape for Financing Services in Europe 14 Crowdfunding – many different types
Basic types of crowdfunding
Non-financial return models Financial return models
Donation Reward Pre-selling Equity Lending
Landscape for Financing Services in Europe 15 The success rate of current space campaigns outperforms the general technology categories on Kickstarter and Indiegogo
60% . Arkyd - a space telescope - raised USD 1.5 Mio on 50% Kickstarter
40% . Elegant set of rewards such as availability of telescope time 30% and backers’ selfies from space
20% . Most successful crowdfunded 10% space mission in terms of funding size 0% Space Kickstarter all Kickstarter Indiegogo all Indiegogo campaigns campaigns technology campaigns technology campaigns campaigns
Landscape for Financing Services in Europe 16 A German Navigation SME as early adopter. Seeking company loan through Crowdfunding
Landscape for Financing Services in Europe 17 VCs engaged in Skybox achieved significant returns
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 TOTAL $91M Ventures „Skybox’s satellites CrunchFund will help to keep 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
Source: Crunchbase, Dan Berkenstock, Skybox Co-Founder during Space 2.0 Conference 2016, SpaceTec Analysis
Landscape for Financing Services in Europe 18 Autonomous Motion Case Study: Baselabs (DE)
Autonomous Motion . Galileo R&D project created scientific foundations . Rainer Horn met founder team as project reviewer . SpaceTec coached the team under government founder scheme . Spacetec supported team with business strategy and market approach . Seed funding by local government fund
Status: . Software suite for autonomous driving and driver . Product compatible with widely used MATLAB assistance (ADAS) applications software toolbox . Automotive OEMs and suppliers can reduce time to . 2014: Automotive software supplier bought 49% market by using rapid prototyping
. Proprietary know-how in automotive sensor fusion . Growing internationally with customers like Bosch, . Licence and service business Daimler, Denso etc. also in China
. Technology sold under vector and baselab brands Sensor Fusion
Landscape for Financing Services in Europe 19 Ubiquitous Connectivity Case Study: Vialight (DE)
Ubiquitous communication
VLC has experience with a wide range of communication scenarios: • Laser communication boosts potential data rates beyond 1 Gbps
• Simplex and bi-directional optical communication links
Optical communication links for . Spin-off from the German Aerospace Centre (DLR) Unmanned Aerial Vehicles (UAVs) and High-Altitude Platforms (HAP) to ground . Develops and manufactures innovative high-rate laser Inter-UAV/HAP communication systems for aerial applications UAV/HAP-to-satellite . Transmit large amounts of data in real time from flight platforms such as aircraft, helicopters, airships, or UAVs Aircraft-to-ground . Applications in remote sensing, natural resources, the film Small sat constellations industry, telecoms, scientific mission support, and defence
Landscape for Financing Services in Europe 20 Ubiquitous Connectivity Case Study: Ovinto (BE)
Positioning & Ubiquitous Communication 10+ year team history, founded 2005
SpaceTec assists Ovinto in tapping the Asian
markets through its GNSS.asia activities
GNSS SatCom USPs – Reducing the cost of ownership and operating cost through improved fleet management & safety levels – Patented ruggedized solution with battery autonomy up to 8 years – Worldwide coverage through >50 Globalstar Communication Satellites – Positioning through Satellite Navigation – Designed to continue where other systems stop in extreme conditions – Approved up to the highest ATEX . Monitor hazardous goods in unpowered transport units explosion safety level (zone 1) . Applications in transport unites (rail wagons, containers) – Encryption of critical business data
. Also heavy equipment targeting shale gas, petrochemicals, Status: 8 employees, growing, global clients mining industries, etc.
Landscape for Financing Services in Europe 21 “Many investors indicate that co-investment schemes can be an important driver in building, growing and professionalising the angel and the VC market by providing a more structured investment process”
Financing High-Growth Firms, OECD (2011)
Landscape for Financing Services in Europe 22 The German High-Tech Gründerfonds is a showcase of how government funds can leverage private investments
. The High-Tech Gründerfonds (DE) invests in high-potential start-ups based in Germany. The fund is a public-private partnership between the German Federal Government, the German development bank (KfW) and twelve industrial groups.
. In the seed stage a minimum of 20% of the capital must be provided by the founders, however half this amount can be provided by business angels, regional seed funds, public or private investors. HTGF is flexible towards private investors, even with regards to investment terms
. HTGF invests up to 500k€ during the seed stage and up to 1,5m€ in follow-on investments in the form of a subordinated convertible loan and an equity share of 15%
HTGF HTGF Other Investors
Lead investor Founder / BA / VC / Etc. Co-investor Follow-on investments
Landscape for Financing Services in Europe 23 Effective financing needs private sector skills and calibration
Impact of Coaching on Dealflow
100%
80%
60% Other 40% Coaching 20% 38% 21% 0% Inquiries Termsheet offer or Investment
Source: HighTech Gründerfonds Dealflow Statistics 2006-2012
Landscape for Financing Services in Europe 24 Key Takeaways
• Space technologies are the backbone of the digital age
Positioning GeoIntelligence Autonomous Motion Ubiquitous Communications …
• Foreign investors discover Space-Tech related investments
• American companies acquire European companies to solidify their business
• Europe is building a thriving space application financing eco-system
• The European Space financing eco-system is incomplete
• There are opportunities for European space companies in global growth markets
• Effective government financing needs private sector skills and calibration
• Government funds can leverage private investments and expertise
Landscape for Financing Services in Europe 25 Contact
Landscape for Financing Services in Europe 26