SkyWatch raises $10 million in bid to commoditize satellite imagery
SkyWatch co-founder James Slifierz hopes that $10 million in venture capital funding will be all it takes to literally change the way we look at Earth.
Slifierz’s Waterloo-based startup is trying to make satellite images an essential component of all kinds of new products by making it cheaper and easier to access them.
The influx of capital from investors, which is being announced Friday, comes at a time when there’s a huge amount of excitement around the business of outer space.
“Costs are coming down on getting to space, and so we have the capabilities of launching more satellites and different sensors,” Slifierz said.
“In 2025, 90 per cent of the satellites that will make up the imaging ecosystem, have not been launched yet. So there’s still a 10x growth in supply that’s going to happen over the next five years.”
But SkyWatch isn’t in the business of putting satellites into orbit; Slifierz said they’re trying to change how the space industry thinks, and create a new business model powered by software.
Historically, satellite images have been expensive and slow.
If a government or a large corporation wants satellite images, they probably need to phone somebody at one of the big satellite companies, and schedule satellites to take specific photos.
“Google, Apple, to update their base maps, they can spend $4-$5 million a year to buy that in bulk,” Slifierz said.
“But if you’re not bringing a million dollars or more to the table, you’re generally being priced out of the market.”
This all worked well enough for an industry that was largely built around big aerospace companies and bloated government contracts.
But SkyWatch has written software that automates the process of ordering satellite images, and allows programmers to embed the computer interface in their code.
With the ability to automatically send a request, and task a satellite to take a high-resolution photo of a specific spot, it opens up all kinds of new opportunities.
And because it’s all automated, and customers aren’t buying in bulk, the prices are dramatically cheaper — as low as $8-$10 per square kilometre.
Slifierz said that the company has largely build its software on seed capital, and now with an infusion of $10 million from investors, he wants to dramatically grow the customer base.
He said the company currently has around 100 customers, but they’re already seeing the possibilities that automated satellite images can create.
“We have customers in more than a dozen different industries,” Slifierz said. “So we’re in oil and gas, for example, and we’re enabling our customers in that industry to replace the use of helicopters with the use of satellites to monitor all their remote infrastructure — primarily pipelines.”
In another example, a home alarm company wants to build an automated system whereby a satellite would take a photo of a house within 15 minutes after an alarm is activated. Right now there aren’t enough satellites orbiting the planet to make that work, but with cheaper launch costs and better satellite technology, it might soon be possible.
“The core investment thesis we have about it is that (Slifierz)’s going to expand the market by at least 10 times,” said Duncan Davidson, general partner with Bullpen Capital, the venture fund that led the Series A investment round. “If you think about it today, it’s a craft business. You have to hire special people to go in and look for the pictures.
“It’s a very expensive business and the pictures are expensive because of that. He’s commoditizing it, so he’s going to open up the market.”
Chad Anderson, chief executive of Space Capital, another venture fund invested with SkyWatch, said Slifierz is trying to bring about the shift in thinking in line with the larger disruption of the industry. Since SpaceX started launching rockets and introducing more competition to the industry, prices have come down dramatically. Miniaturization of technology has also allowed for satellites as small as a microwave, whereas a few decades ago, a serious satellite had to be as big as a school bus.
But the old space industry is still stuck in a 20th-century mindset, and hasn’t come around to thinking about a much larger market for satellite images.
“The interesting thing about SkyWatch is that it bridges the chasm between the aerospace community and the tech community,” Anderson said.
“I think we’re just scratching the surface here. We’re going to be launching a lot more satellites over the next five years, and it’s going to be driven a lot more by demand signals that just don’t exist without SkyWatch.”