RRE Ventures – Will Porteous

I’ve been neglecting the blog over the last few months because of some medical issues in my family and a major project for the Dockery Farms Foundation. I’ll have more to say about that project in the weeks ahead, but this morning I’m excited to talk about RRE’s investment in Spaceflight and the launch of its BlackSky Global division.

Spaceflight is executing on many of the trends that we see affecting the satellite industry broadly. After decades of isolation, open systems thinking is finally coming to this industry. For those of us who actively invest in enterprise systems businesses (networking, processing, and storage hardware) it is difficult to fathom the monolithic and proprietary design approach that still persist in most of the satellite industry. The rest of the systems/hardware industry relies on Commodity- Off-The-Shelf components, open architectures and standards and a universe of offshore contract manufacturers. The expense of launch and of operating in the harsh environment of space have been major drivers of this approach, but the willingness to pay of Government and Defense customers has also been a big enabler. This is of course changing as the Government outsources more and more responsibilities to new suppliers. There is no better example of this than SpaceX’s contract to supply the International Space Station.

The most important enabler of this shift to open systems thinking has been increasing access to affordable launch opportunities. This has enabled satellite system designers to think in terms of replenishing the elements of a satellite constellation much more regularly. Once launch is cheap and easily accessible, then satellites become much easier to replace, which opens the door to considerable simplification in the way they are designed.

Spaceflight is deeply rooted in the legacy satellite industry, having developed small satellites for government and defense customers for more than a decade. But the company has also been a leader in increasing access to affordable launch and designing smaller form factor satellites that can still deliver high quality imaging to meet specific customer requests. We invested in CEO Jason Andrews and this extraordinary team in part because they are so deeply rooted in the industry, but also because they are consciously reinventing it. We spent a great deal of time analyzing the imaging market and the business model choices of other companies in the sector. We believe Spaceflight and its BlackSky Global division blends the best of modern systems thinking with a commercial approach that is well tuned to the needs of government and enterprise customers alike. We are delighted to have led the company’s Series B financing alongside our friends at Vulcan Capital, Razor’s Edge, Chugach Alaska Corporation, and Apogee. And we will work with our friend Richard Fade, who also served on the Whiptail Technologies board, any chance we get. Spaceflight is the 3^rd company in RRE’s space portfolio, which also includes Spire and Accion Systems.

We are excited to announce our investment in Accion Systems this morning alongside a syndicate of some of our favorite co-investors. This is our 2nd investment in a New Space company after we led the Series A round for Spire last spring.

Accion is commercializing a new ion-based propulsion system for spacecraft. We were introduced to co-founder and CEO, Natalya Brikner by our friends at Undercurrent, who share our passion for new space technologies.

Electric propulsion is the next big thing in small satellites. In order for cubesat constellations to achieve their maximum useful life, operators need to be able to manipulate the spacecraft beyond what is possible with simple reaction wheels. Propulsion systems that use combustible fuels are not allowed on the ride shares that cubesats depend on, so a new type of propulsion system is needed. There is also a lot of discussion in the industry about regulatory standards that would require a deorbit mechanism on cubesats (in part to deal with the space junk problem). The Accion Systems products are a logical solution.

The core technology has been under development at MIT for 10 years. It produces a tiny unit of thrust, about the size of a penny. While I am not a physicist, my layman’s understanding is that these engines convert a cheap, non-volatile plasma into streams of ions that can impart thrust. The Gen 1 products are sufficient to move a 3Kg Cubesat and extend its useful life. The Gen 2 systems should be able to impart considerably more thrust and will be useful for larger satellites. The systems are already being manufactured reliably and they have had hundreds of hours of ground tests. With nearly 1,000 cubesats being launched every year and considerable demand for propulsion for both large and small satellites, we think Accion has a terrific addressable market opportunity.

As much as we love the technology here, it was the team’s pragmatism about the company building process and their strong commercial instincts that really persuaded us. Natalya and her co-founder, Louis Perna, have given a lot of thought to how to build a strong, high performance culture that can last for the long term.

We are delighted to welcome Natalya, Louis, and the team at Accion Systems to the RRE portfolio and we look forward to working with them in the years ahead.