Space-powered radio frequency data-as-a-service company Kleos Space (ASX: KSS) has made what it describes as “strong commercial progress” with revenue generation imminent.
Kleos chief executive officer Andy Bower said the March quarter had been productive for the company.
The quarter saw Kleos’ in-orbit commissioning and testing of its scouting mission satellites, while developing the complex data processing and subscriber management systems required to fulfil its contracts.
Data delivery and subsequent revenue are scheduled to begin in the current June quarter, with Kleos also progressing the development and launch of its second and third satellite clusters.
“Our growing constellation increases the capability and value of our geospatial data products, improving coverage over multiple key areas of interest to generate new datasets and tiered licencing options for subscribers,” Mr Bowyer explained.
He added the company remained focused on commercialisation as it transitions its operational data-as-a-service model with scalable recurring revenues.
In what Kleos describes as a “world first” it launched its Kleos Scouting Mission (KSM1) satellite cluster late last year.
It is the world’s first four satellite cluster flown in a formation targeting a precision geolocation capability.
Kleos is using the satellites to set up space and ground segments and will provide coverage over key areas of maritime interest.
The satellites detect and geolocate radio frequencies to improve the detection of hidden and illegal activity.
Kleos is now transitioning the satellites from commissioning and testing to their operational state.
The radio frequency geolocation data will be sold as a service – with entities able to purchase single user, team or enterprise data licences.
Similar to software-as-a-service, this business model is expected to generate recurring revenue.
Billion dollar addressable market
Mr Bowyer noted that Kleos’ addressable market in geospatial technology was predicted to reach $549 billion by 2025.
Kleos is hitting this market with its independent intelligence data.
Mr Bowyer says its technology can provide governments and commercial entities with intelligence, surveillance and reconnaissance capabilities.
These include detecting illegal activities such as border and security challenges, piracy, drug smuggling, illegal fishing.
According to Mr Bowyer, this level of information has previously been unavailable.
“Demand for our global maritime intelligence data is being driven by the high financial, societal and environmental costs of illegal activity at sea, and the ongoing challenges of policing large coastlines and international waters.”
“Our global geolocation data can be used to validate or tip and cue other government or commercial datasets and has broad applications within defence and security, maritime intelligence, insurance, regulatory and environmental sectors,” he added.
To facilitate its entry into the billion-dollar market, Kleos secured a distribution agreement with US Government IT solutions provider Carahsoft Technology Corporation.
The agreement gives Kleos access to Carahsoft’s US federal, state and local government contracts. Carahsoft will promote Kleos through a dedicated microsite, webinar and marketing materials.
The US is the largest market for geospatial intelligence and reconnaissance data and through the Carahsoft deal, Kleos is targeting more than 30 government customers in the country.
‘Dozens’ preparing for Kleos maiden intelligence
As Kleos eyes first revenues, it is completing initial integration contracts with “dozens and integration partners” worldwide preparing for the first KSM1 data.
The company noted the contracts include a provision for extensions which can be exercised after an evaluation period with a subscription pricing agreement.
Additionally, Kleos is seeing “strong” interest for its data from defence, naval, coast guard and other border control and security agencies from many countries.
The company is targeting 50 active subscribers by year-end, with a pipeline of more than 160 opportunities.
To increase its capability, Kleos’ second satellite cluster the Polar Vigilance Mission (KSF1) is on track to be launched mid-year.
A third cluster Polar Patrol Mission (KSF2) is under development with that launch scheduled for the end of the year.
Subject to the successful launch of KSF1 and its data products, Kleos anticipates entering 2022 with an annualised revenue of US$7 million.