SMALL SATELLITE

MARKET 2018 INTELLIGENCE REPORT

This issue of the Satellite Applications Catapult’s quarterly Small Satellite Market Intelligence report provides an update of the small satellites launched Q3 in Q3 2018 (1st July to 30th September 2018). This edition also includes a closer look at national strategies for encouraging growth in the NewSpace industry. IN Q32018 LAUNCHED SATELLITES SMALL trend andnotapredictionperyear. accelerating marketuptakefollowedbyalevellingoff) providesageneral Note: Themathematicalmodellineinthegraphabove (simulatingan should offsetthisdownturnbeforetheendofyear. which alsosawadozenlaunched.Largenumbersofsatellitesscheduledforlaunch inQ4 launched over5launches,followingthe41inQ2.ThisislowestquantitysinceQ12013, The downturn in small satellites put into orbit continued into Q3 with just 12 satellites OVERVIEW 2017 asaparticularly highvolumeyear. record ofover 300satellites,highlighting for roughly doublethenumber ofsatellites of has individually launched high quantities In addition,noconstellationoperators launch in2017,hasoccured. launches, such has launches quantity specific high no Furthermore, occurred. satellite small postponement, whichhasmeantfew fi at looks, 2018 in far so are scheduledfor manifest ofPlanet market is still tightly coupled to the delays, suchas The real-world reasons include launch both real-worldandanalyticalcauses. part of alargertrend. However, it has including large satellites), 14+ with launches (6 launches fl periodic frequency israndomandwithoutclear frequency of this report. Launch The analyticalcauseisthesampling dependency shoulddecrease. constellation begintolaunch, OneWeb, nowdelayedtoearly The satellites. Thesmallsatellitelaunch 2018, decline in smallsatelliteslaunched 2018 willnotmatch2017’s cutos ih quantity uctuations. High numbers ofPlanet Doves as the103 the Q4. and Spire.As RocketLab Electron

Whilst thiswill rst glance, like rst glance, satellite PSLV 2019, this including more 02 or educationalinstitutions. satellite. The restwereall either technology demonstration oreducational satellites operated by governmentagencies Of • • • Applications aredefinedbytheprimaryobjectiveof themissionascategorisedbelow: APPLICATIONS the 12 satellites launched, only one was categorised as ‘Commercial’: DMC 3 (TripleSat), an Earth Observation Earth an (TripleSat), 3 DMC ‘Commercial’: as categorised was one only launched, satellites 12 the or itsatmosphere. Earth observation/Remotesensing:theobjectiveof the missionistoprovideimageryordatarelatingEarth or totestthefunctionalityofpayloadequipment; Technology/ Scientific: the objective of the mission is to gather knowledge toCommunications: theobjectiveofmissionistotransmit orreceivesignalsto/fromauserterminalgateway; better understand physical phenomena

03 of thetotalmasslaunched thisyear. launched thisquarter,meaning thatthosethreeminisatellitesaccountfor98%of thetotalmassinthisperiodand20% were picosatellites or micro-satellites No kg. 10 under CubeSats were nine other the kg), 400 than greater which of quarter show a divide in small satellite design. Whilst three of the twelve satellites had masses greater than 100 kg (two Whilst weshouldbecarefulnottoidentifytrendsbased onsofewsatellites,thesizeandmassofsatellitesthis SIZE ANDMASS Small Satellite<500kg Satellite classification Satellitesubclassification Pico-satellite Nano-satellite Micro-satellite Mini-satellite Associatedwetmassrange 0.1 kg–1 1 kg–10 10 kg–100 100 kg-500

04 picosatellites arecurrentlylimitedintheircapabilities; presentlytheyaremostlyforeducationalpurposes. picosatellites launchedandcontinuethetrendtolower masssatellites.Thisisexpectedtoeventuallyleveloutas The Q4launchofVirginiaSpaceThinSats,aset 12 educationalpicosatellites,willgreatlyincreasethenumberof low masssatellitelaunches. This ismostlyduetothehighnumberofPlanetandSpiresatelliteslaunchedlastyearskewing2017 high volume, This bringsthetotalmasslaunchedthisyearsofartojustbelowreached in 2017, despite the fewer satellites. SIZE ANDMASS

05 rideshare carriedfourCubeSatstoapolarorbitandallotherswenttheISSviaSoyuzH-2B. The threeminisatelliteswerelaunchedintoSunSynchronousOrbit;twoonaPSLVandoneLongMarch. ADelta ORBITS

06 There werenorocketfailuresthisquarter. in November.SpaceX’sFalconHeavyshouldconduct itsfirstcommerciallaunch,carrying29smallsatellites. Virgin Orbit’s LauncherOne and Vector Space’s Vector-R have not provided firm launch dates but are aiming to launch November andprivateChinesecompaniesOneSpaceLandSpaceracetobethefirstorbit. issues with the motor controller. Q4 should see some activity in the industry as the Electron is due to launch in The worldofsmalllaunchalsohadaquietquarter, with RocketLab’sElectron launch furtherdelayedduetocontinued LAUNCH

07 supplemented withmorespecificstatutoryinstruments in2019. spaceports inScotlandandCornwall,whichcouldbe operationalwithinafewyears.Thisprimarylegislationistobe in investment of announcements recent the enabled has This flight. orbital and orbital sub for facilities launch operate development of horizontalandvertical launch capabilities. It outlinesthelicences and liability insurances required to The UK’sSpaceIndustryAct2018aimstoboostthe UK’spresenceinthecommercialspacesectorbyfacilitating in thecountry. offices open to Industries Space Deep and Resources Planetary companies mining space futuristic encouraged fund, of resources mined from space. The ‘Law on the Exploration and Use of Space’ has, along with a space mining specific In 2017,LuxembourgbecamethesecondcountryafterUSAtopassnationallegislationallowingcommercialisation Supply –enablingcompaniestooperate space. sector growth.Thesecantargetvarioussectorsfromenablingsupplytobuildingdemandandstreamlining accessto Arguably theeasiestwaytosignalyourcountryisopenforspacedevelopment is tocreate regulationsthatallowspace POLICY ANDREGULATION should bereadnotasanexhaustivelistofdevelopments,butaselectioninitiativespursuedbyvarious nations. have seen significant developments over the last few years, boosting growth in the NewSpace industry. The following There aremanymoreaspectsthatagovernmentcanconsider,howeverwehavefocussedonthesethree asthey 3. 2. 1. industry hasincreased increasingly backedbyprivatecapital,fuelledtheconstellationsofspacedata.Asinvestmentin are seeingopportunitiesvaluechainandcreatefurthergrowthbyenteringnewmarkets.Theseventureshavebeen Whilst space used to be the domain of governments, militaries and large multinationals, increasingly entrepreneurs FOR GROWTHINTHENEWSPACEINDUSTRY NATIONAL STRATEGIESANDPOLICIES Here welookatofthreeimportantcomponentsanoverallnationalspacestrategy: their owncountries,usingarangeofincentivestoenticestart-upsandscaleupssetuplocally. 2 1 Spaceinvestmentquarterly –Q32018,SpaceAngelsNetwork USA, Russia,France, Japan, China,India,Israel,Ukraine,Iran,North Korea andNewZealand and importanttoanation’sautonomy. and launchingarocketfromtheirland building of capability the have countries 11 around only Currently, difficult. is space accessing capability: Launch mission. satellite any attempt to necessary is success to key is finance and industry capital-intensive a is space Funding: entities operatingwithinanation. Policy andregulation:thesetsofprinciplesassociatedlegalmechanismstoguidedecision-making 1 , governmentsseethepotentialgains of encouragingthiscommercialinnovationtohappenin 2 . Mastering the capability of deploying a satellite in orbit is a differentiator a is orbit in satellite a deploying of capability the Mastering .

08 in riskier ventures by offering various tax reliefs to investors. Oxford Space Systems recently saw an investment of investment an £2.1m throughanEIS-based fund. saw recently Systems Space Oxford investors. to reliefs tax various offering by ventures riskier in investment private incentivise (EIS) Schemes Investment Enterprise this, to addition In Catapult. Applications Satellite Capital Fund,combiningpublicandindustrymoney with technicalsupportbyESA,theBritishBusinessbankand In theUK£70mSeraphimSpaceFund,managed bySeraphimCapital,waslaunchedin2017.ItisanEnterprise cash availability. spacecraft thrusters from ITAR.Whilst the regulations are controversial, the economic impairment is generally dhaving and satellite removing clarified, were regulations the year this October in and companies, US impacted has This to. US spacecompanieshavemarketedtheirproductsasITAR-freeandsoldtoareasthat arenotable non- then, Since 1996. in satellite American an of launch Chinese failed a after industry space the affect to grew This International Trafficking in Arms Regulations (ITAR) mean the flow of products are stunted by national securityJust aslegislationscanencouragedevelopment,theyalsohamperit.ThestrictUSexportrules underthe concerns. Balancing commercialopportunitieswithsecurity of othercompanies.Thisrapiddevelopmenthasbeenmostlyfuelledbyprivateinvestment. handful small a and OneSpace by followed soon launch, orbital first LandSpace’s this: of results the see to expecting matches spaceentrepreneursandideaswithpotential investors the with collaboration in programme the overseeing state-owned DevelopmentBankofJapan.Furthermore, theyhavelaunchedaweb-basedplatform‘S-Matching’that are R&D, Japan’s of much coordinate and fund who (NEDO), the fullfundifdevelopmentissuccessful.TheNew EnergyandIndustrialTechnologyDevelopmentOrganisation to access have will they which after it, develop to (£68k) ¥10m to up given be will idea promising a with Companies Earlier this year the Japanese government announced a ¥100bn (£680m) fund over five years specifically for start-ups. in thelastfewyearsgovernmentshavesetupVC-stylefundstodeveloplocalcompanies. linked to military capabilities. In the NewSpace industry, enterprises are commonly funded by venture capital, and so The spaceindustryhaspreviouslybeenthedomainoflargecompaniesfundedbygovernmentagencycontracts, often FUNDING navigation satellitesandencouragingthedevelopmentofanenvironmentfavourabletoentrepreneurship Basic Space Plan strategizes the next decade of Japan’s growth, including development of new communication and reduced the‘non-military’banto‘non-aggressive’;thiswasenactedaspartofBasicplanonSpacePolicy.The in 1969thatrestrictthemilitaryuseofspace,includinghighresolutionEarthimagery.In2008BasicSpaceLaw Mitsubishi. Theyhavehadalackofdemandforspacehardwarefrommilitaryapplicationsduetonationallawsenacted Historically, Japan’s space industry, as much of their economy, has been dominated by large corporations such as Demand –creatingopportunitiesforthecommercialsector participate moreindevelopingspaceinfrastructure,buildingsatellitesandlaunchers commercial activitiesandencouragingenterprise.In2014,Chinaannouncedthatprivatecompanieswould beableto gained its own white paper, supplementing the plan, in 2000. The most recent white paper (2016) specifically mentions areas for development over that detail time frame. Whilst which we are plans, currently in the five-year 13th plan their (2016-2020), it in is telling that found space is obscured clarity is some acronyms, system private and economic state Chinese of network the complex Whilst a behind intent. a clear signal can document official an in line a just Even 5 4 3 https://s-matching.jp/ http://www.gov.cn/zhengce/content/2014-11/26/content_9260.htm, section7 http://www8.cao.go.jp/space/plan/plan-eng.pdf 5 . 4 . Bytheendofyearweare 3 .

09 specifi In Septemberthisyear,France’sCNESsetupasimilar€80-100mventurefundnamed‘CosmiCapital’thatfocuses start In theUK, horizontal and vertical launch facilities are being developed; Sutherland Spaceport recently received £3m to many areasthesupportinginfrastructureisstillinneedofdevelopment. be funded for less than $100m; still a significant cost for any start-up. Whilst the rocket technology is almost ready, in Growth Kleos Space,OQTechnology,andAistechSpace. currently it is home to offices of at least 20 space companies, including current and future constellations such as Spire, companies andthespaceagencytotakeofffromsouthernItaly,launchingoverMediterranean Sea. Zero2Infinity and respectively. In Italy, Virgin Galactic has signed various memorandums of understanding with Italian but launch capabilities. PLD Space have made the case for launch from the Spanish Canary Islands off the coast of Africa, overfl to water open more is there where Much populated Gilmour as more such companies the Space, whoaredevelopingasmallhybridfuelrocket. rocket for and sites Australia) launch be Launch could These (Equatorial regions. Launch) Land Space Arnhem (Australia Queensland remote the in sites potential with capability In Access andReactionEnginesaredevelopingtechnologiesrequiredforspaceplanes. smoothly. TheUKhas remain, includingmoredetailedregulatoryandinsuranceframeworksthatallowtheselowercostlaunchers tooperate recently signeda speci into and The capability ofbothbuildingandlaunchingarocketfromtheirterritory. only and spaceportarethegatewaytospaceiscrucialforanation’sautonomy;butit resources arelimited.Manycountrieshavebeenattractedtotheideaofhavingalaunchcapability.A vehicle favourable Beyond L strategies forinitialinvestors,iskeythefuturesuccessofsector. owned bankSociétéNationaledeCréditetd’Investissement.Luxembourghashad mining space specificallyfor up September 2018 concurrently with their ‘commercially oriented’ space agency, the fund is managed by the state- set was fund €200m a law, resources companies. Furthermore,a space the to addition in Luxembourg, In CapDecisif, aimingtohelp4-5start-upseachyear.Itwillbegininvestinginearly2019. AUNCH CAPABILI July, alternatives suchas growth in putting concreteintheground,aimingforlaunchesearly2020s.Atotherendof 14 cally on space and space applications. It is funded by CNES and industry and managed by venture capital fi of mainlandEurope’slaunchcapabilityislimitedby geography,withFrancelaunchingfrom Australia createditsspaceagency,thelastOECDcountry todoso.Australiaislookingregainits of private nations small satellitesandconstellationshascreatedanewmarketfor fic orbits. Small launchers provide a cheaper alternative to large national launch programmes and can and programmes launch national large to alternative cheaper a provide launchers Small orbits. fic ae launched have memorandum ofunderstandingwithSpaceportCornwall equity funds regulations several domesticverticallaunchersin air-launch andballoonlaunchtechnologiesare €100m TY and rce from rocket a and mechanisms to scaletheseinitial investments, includingIPOsandotherexit financial i fund wascreatedformoregeneralspacetechnologycompanies.Launchedin y. That has not stopped Spanish companies is looking at developing small developing at looking is companies Spanish stopped not has That y. ncentives, it can h can ncentives, it their ad and land development, includingSkyroraandOrbex, as elp t of o have a o have now being developedbyCelestiaAerospaceand ny around only small launchers,abletolaunchfrequently to launchfromthepeninsula.Obstacles s pecific va some successwiththisapproach:

11 countrieshavethe lo difficult. also lue proposition, es lue proposition, the country French Guiana, Historically, Virgin Orbit and Orbital pecially if launch rm 10 essential forthelong-termdevelopmentofanationalspaceindustry,andgovernmentalstrategiesare tothis. funding orexpertise,butcreatingadiversespacemarketthatcanfosterinnovationfromacademiato operationis rising smalllaunchindustry.Thereisnosinglesolutionoridealspaceecosystem,withcountrieslimitedby geography, favourable regulationsandfundingmechanismshasboomedinthelastyearislikelytocontinue,especially inthe and areimplementingstrategiestobethego-to nations forNewSpace companies andresearch.Thedevelopment of future commercialgrowth.Anincreasingnumberofcountriesareseizingtheopportunityeasieraccess tospace As NewSpace continues to mature, governments are establishing mechanisms to attract this wave of innovation and A NEWSPACERACE? or ifnot,enablingthemtomoveanothercountrythatcan. spaceports pop up across the globe, regulation is likely to be the limiting factor, enabling companies to launch easily, applications, but acustomer is unlikely to prioritise launch location over price, regulatory ease and responsiveness. As as theUK,alaunchcapabilityfeedsintowiderecosystemofsatellitemanufacturers,operatorsanddownstream that canlaunchintoorbit,theglobalindustryisabout10%ofwiderspaceindustry.Forcountriessuch it maynotbeessentialforacountrytohavelaunchcapabilities.Whilstgrantsaccesstheshortlistofcountries There isalimittothenumberofsmalllaunchersthatwillbecommerciallyviable;notallsucceed.Furthermore, recent launchfailure(seeQ22018report)itmaybeawhilebeforethisisfullyoperational. Technologies arecreatingasmalleroptionandoperatefromtheirnewtestcentreinHokkaido,thoughfollowing Japan already has launch sitesand rockets, including the Mitsubishi Heavy Industries H-II. Upstart Interstellar

11 team andwewillmaketheamendments. or suggestionstoourreports,kindlyemailthe case. Ifanyreaderwouldliketocontributeedits we recognisethat this might not always be the to provideaccurateandupdateinformation, made been has effort every whilst Disclaimer: Copyright ©SatelliteApplicationsCatapultLimited2018 W: sa.catapult.org.uk/small-sats-market-intel T: E: [email protected] us at: would beofvaluetoinclude.Youcancontact welcome feedbackonotherdatapointsthat information thatiseasytoaccessanduse.We is designed as afree data source to share The SmallSatelliteMarketIntelligencereport Contact +44 (0)1235567999

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