Open Cosmos, a UK satellite startup focused on sustainability, raises $50M

Satellites have come into focus as a critical way -- and sometimes the only way -- to deliver communications and receive data about certain locations around the world, a power position that can be heroic but also ripe for abuse, and that's before considering how their presence contributes to the growing problem of space debris.

Now, U.K. startup Open Cosmos, which is building what it describes as "sustainable" low-earth orbit satellites and an end-to-end system for managing the data gathered through them, has raised $50 million aimed at making access more democratized through a platform it has built that lets multiple organizations use single satellites, or more typically a constellation of satellites, and (if they choose) share the data they collect with each other.

The company -- co-founded by three aerospace engineers out of Spain -- has been around since 2015 and caught the eye of the industry early on when it managed to put together and launch its first LEO satellite on a shoestring budget, notable not least because of how much capex and opex typically go into aerospace work and the outsized budgets organizations need to get a seat at the table for using satellite data. Nowadays the startup works with major space agencies as well as companies like Amazon (specifically AWS) and engineering, systems and security business RHEA Group, agribusiness firms like Lacuna Space, and more.

While its platform, hardware and systems technically could be used for a plethora of applications, the focus for Open Cosmos is on energy and climate monitoring, said CEO Rafel Jorda Siquier.

"We only provide to those who want to be good actors in those domains," he said in an interview. The satellites themselves eventually degrade and break up as they re-enter the atmosphere, essentially leaving no parts behind.

The funding is notable for a number of other reasons, including the investors involved and the wider context for funding in areas like deep tech and space tech.

ETF Partners, Trill Impact and A&G -- three backers focused on impact investments -- are leading the round, with several interesting strategics involved, including Accenture Ventures, Banco Santander/InnoEnergy Climate Tech Fund (the financial group acquired a stake in the latter a week ago), IREON, Wille Finance and Claret Capital Partners. Entrepreneurs turned investors Taavet Hinrikus and Kheng Nam Lee also participated in the round. That list of backers speaks to who might be working with Open Cosmos already, as well as what opportunities it might have in the future.

As one example of that, Accenture said today that its investment is part of a partnership that it's forming with Open Cosmos to implement and run data projects for Accenture customers, particularly with a focus on sustainability.

This investment is a standout given the current climate for startup investing.

Funding for startups continues to be constrained, and in Europe specifically, in Q2 of this year, the amount invested in startups was half the amount as the year before, according to figures from Crunchbase published at the end of August.

Artificial intelligence is one salient, in-demand category that continues to stand out at the moment, but the picture has been a very mixed one for space tech, which is up on the end of 2022 but still far below highs (no pun intended) of previous years.

In fact, one take on why funding for space tech has gone up 120% in the first half of 2023 compared to the last half of 2022, was not because of a sudden interest or recovery in the funding landscape, but because so many founders delayed raising rounds in 2022 that they've had no choice but to fundraise. And some have gotten deals, albeit at lower valuations or at lower amounts.

Open Cosmos's $50 million is also a big leap for the startup itself: It is more than seven times the amount it had raised in the years leading up to now.

Jorda Siquier, who co-founded the company with Aleix Megias Homar (VP operations) and Jordi Barrera Ars (VP technology), declined to give any indication of the company's current valuation pre- or post- this latest investment.

But for some context, it's been very lean, especially for a hardware startup: The startup had raised only around $7 million in total, and while PitchBook estimates that its previous valuation was a modest $36 million, it has been EBIDA positive since 2020 -- meaning it's operationally profitable (but yet to reach full profitability). All of that points to a company that investors might feel is less risky to back right now.

That's especially interesting given Open Cosmos's current market opportunity: The company's focus at the moment is on applications in areas like climate and agriculture, specifically with a view to sustainability and projects that help further that. This would put the firm at arm's remove from communications and data connectivity for other kinds of uses and users -- although even sustainability, arguably, is a critical geopolitical category, when you consider that organizations like NATO (and the U.S. government, and others like it) are investing now in startups that can help states be more independent when it comes to utilities and resources. It also doesn't rule out what and how Open Cosmos might do in the future, and for whom.

This alone can be a huge area, covering data that can be tough to measure otherwise in categories like illicit (or simply ignored) deforestation projects, the development of greenhouse gases, monitoring the progress of polar ice caps and sea levels as well as ocean currents -- covering some 54 climate variables in all. Satellites also play a crucial role in relief efforts for natural or other disasters. Open Cosmos, citing research figures, estimates that rising demand for earth orbit data is a market segment that will be worth $11.3 billion by 2031.

“Space data has always been an important means of understanding planet Earth, but it is only with its increasing affordability, the amplifying effects of climate change and the rapidly growing number of AI/ML solutions that extract insights from this data that the market is now ready to reach its full potential," said Toba Spiegel, investment manager at Trill Impact, in a statement. "Open Cosmos is the leader in providing multi-sensor space data at an affordable cost and the first to create an appstore-like analytics offering.”

“Open Cosmos has demonstrated not only its unique end-to-end technologies as seen in its organic growth and financial stability but that the team is in a strong position to now take the company to the next level," added Juan Diego Bernal, managing director, A&G Energy Transition Tech Fund. "We look forward to working with the team to seize these market opportunities and solidify its position as a leader in the space technology sector and leveraging its cutting-edge technology to boost the Energy Transition for a better world.”

Updated to remove In-Q-Tel as an investor at the company's request.