In this piece, we will take a look at ten VLEO technology stocks and startups to watch. For more VLEO companies, head on over to 5 VLEO Technology Stocks and Startups to Watch.
VLEO, or very low Earth orbit, is the lowest orbit that a satellite can take without being overcome by the forces of gravity and crashing back to Earth. It’s also one of the most underdeveloped orbits right now, particularly as its close counterpart, LEO is just starting to gain interest among the corporate sector. VLEO covers spacecraft that orbit the Earth below 450 kilometers, while LEO ranges in definitions. For instance, NASA classifies LEO as anything below 2,000 kilometers, while the European Space Agency (ESA) defines low Earth as below 1,000 kilometers.
The most popular use of LEO is SpaceX’s Starlink satellite internet constellation. Starlink is the latest attempt to create a constellation of satellites to provide high speed internet access to both remote and populated areas of the globe. Contrary to popular belief, Starlink is not the first satellite constellation that aims to use LEO orbits for internet coverage. Additionally, satellite internet options have been available for almost two decades now, but these use higher orbits and larger satellites. However, these higher orbits have the simple disadvantage of being too high up, which then increases the time spent for the data to travel between the user and the satellites. Additionally, this altitude also leads to significant data loss as well and ends up in a rather poor experience for the end user.
Moving back to LEO internet, the first attempt to populate the orbit for internet use was made by Teledesic Corporation – a Washington firm set up in 1994 with plans of using a 288 satellite constellation in LEO for high speed internet access. The first Teledesic satellite was launched in 1998 as a demonstration project, but the project ended up being a failure and Teledesic went out of business in 2002. The project had, at the time, garnered $1 billion in investment (worth a little more than $1.5 billion in today’s money), and Teledesic’s fall came as a shock to many especially since at the height of its popularity many analysts had in fact started to worry if the firm would end up having a monopoly over global satellite broadband.
Space, as they say, is hard. And no one has been more vocal about the pitfalls of setting up a satellite internet constellation than SpaceX’s founder and chief executive officer Mr. Elon Musk. Musk’s Starlink satellite internet constellation is the largest of its kind in human history, and throughout its journey of having launched more than four thousand satellites so far, he has regularly warned about the need for Starlink to be cash flow positive. Some of Musk’s most telling comments about the costs of building Starlink came during the Mobile World Congress (MWC) in June 2021, where the executive shared:
Well, I think it depends on how you count investments. One way to count investment is to what is the total amount of money invested before Starlink becomes positive cash flow, and how much in that you include Falcon 9 and everything done there. You know I think probably before we go to fully positive cash flow it might be, it’ll be at least $5 billion and maybe as much as ten. That’s quite a lot. And, then you see how much you invest after it goes positive cash flow, I think we have to keep investing a great deal after that point in order to not being made irrelevant by continued improvements in cellular and continued expansion for cellular. Or lower-cost geosynchronous satellites.
You know geosynchronous satellites can serve large swathe of territory but the total [inaudible] they conserve is not great and the latency is high. So we need to be able to offer our service at a comparable or ideally lower rate than GTO satellite connectivity. So, it’s just basically total investment probably is like at least five, maybe $10 billion and then over time it’s gonna be a multiple of that and go to $20 to $30 billion over time. It’s a lot basically.
SpaceX doesn’t plan to limit itself to LEO only. In fact, the company’s Starlink constellation eventually envisaged t0 launch up to a whopping 30,000 satellites as part of the Gen2, or second generation, satellite upgrades. Out of these, roughly 24,000 will be in orbits ranging from 328 kilometers to 373 kilometers and most will be in orbits lower than 345 kilometers. However, to keep up the pace of its second generation constellation with the Starship rocket, SpaceX upgraded its plans in 2021 and reduced the number of satellites to be launched between 340 kilometers and 360 kilometers to roughly 19,000 spacecraft.
However, SpaceX is not the only one interested in the VLEO orbit. Its proximity to Earth not only provides for faster internet access but also crisper satellite imagery. On both these fronts, there are multiple research papers that swear by the benefits of operating satellites in lower orbit. One such paper from the British designer of orbital propulsion systems Anchor Orbital Systems shares that spacecraft in VLEO has the potential to solve the age old problem of space debris. Space debris is a growing problem that poses hazards not only for spacecraft leaving the Earth’s atmosphere but also to astronauts living and working on the International Space Station (ISS). In fact, the astronauts and the cosmonauts have had several close calls with debris already, with the latest close call coming in March 2023 when astronauts had to fire a docked spaceship’s thrusters to avoid a possible conjunction event.
Anchor Orbital uses data from an ESA satellite to show that when a satellite’s orbit is reduced from 300 kilometers to 250 kilometers, the drag force that it experiences more than triples. This higher drag leads to the deorbit time for a satellite to reduce to mere weeks instead of years that would have been the case in higher orbits such as geostationary. Another research paper, this time from the University of Manchester, shares that VLEO orbits improve the signal to noise ratio for radars, improved positioning accuracy for location systems, better margins for communications systems, and higher spatial resolution.
With these details in mind, let’s take a look at some very low Earth orbit (VLEO) technology stocks and startups that need to be on everyone’s radar.
Our Methodology
To compile our list of VLEO companies, we first dug deep to figure out which firms are developing technologies for this avenue. Then, the firms market value or funding raise was determined when possible. All figures for funding raised are sourced from CB Insights or Crunchbase, and valuation estimates are sourced from press items. The firms are ranked according to these estimates, and the list starts by listing those companies for which no such information is publicly available.
VLEO Technology Stocks and Startups to Watch
10. Smart Small Satellite Systems GmbH
Latest Valuation/Funding Estimate: N/A
Smart Small Satellite Systems GmbH is a German startup set up in 2017. It aims to develop and manufacture small satellites, such as those built on the nano or pico scales. The company is working on a variety of interesting projects, such as those involving the study of cloud structure by using technology similar to CT scans, three dimensional Earth observation, and quantum satellite communications. Smart Small Satellite Systems GmbH also won a contract from the European Space Agency (ESA) in 2021 to develop a telecommunications VLEO satellite.
9. Kreios Space
Latest Valuation/Funding Estimate: N/A
Kreios Space is one of the youngest companies on our list, since it was set up just two years back in 2021. It’s a Spanish company headquartered in Barcelona, Spain. The firm is a backend satellite component designer, and it focuses its efforts on developing air breathing electric propulsion (ABEP) systems for use in VLEO. As opposed to traditional orbits, such as geostationary, VLEO orbits provide satellite designers with novel opportunities and challenges due to a thin layer of the Earth’s atmosphere. Kreios Space’s system uses air to generate plasma and accelerate it to produce thrust.
8. Thales Alenia
Latest Valuation/Funding Estimate: N/A
Thales Alenia is one of the more established companies on our list. The firm was set up more than a decade ago and it is a joint venture between two firms. Thales Alenia makes satellites and other space equipment such as space station modules and cargo transportation modules. It is also developing a VLEO satellite demonstrator called Skimsat. This is an Earth observation spacecraft and has a unique design where its solar panels are shaped like wings.
7. Cubecab
Latest Valuation/Funding Estimate: N/A
Cubecab is an American company based in California. The firm has one of the most interesting plans to launch satellites to VLEO, as it eyes to use a small 3D printed rocket attached to the wing pylons of a retired fighter jet for launch instead of first stage rockets that are used right now. The firm also won an award from the Air Force in 2021 to study the rapid deployment of CubeSats into VLEO to set up battlefield communications networks.
6. Skeyeon
Latest Valuation/Funding Estimate: $1.8 million
Skeyeon is another American company. The firm is based in San Diego, California and it is developing small VLEO satellites for Earth imaging applications.
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Disclosure: None. 10 VLEO Technology Stocks and Startups to Watch is originally published on Insider Monkey.
